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Loan Prospector® Outreach

Mortgage-Readiness Assessment for Housing Professionals

Loan Prospector® Outreach March 11, 2012 Release

Updated Income Documentation Feedback Messages

To provide you with more detailed and specific income guidance related to borrower income, we are updating certain income documentation feedback messages in Loan Prospector Outreach. These feedback messages will be returned on all Loan Prospector Outreach submissions, including new submissions and resubmissions, on or after March 11, 2012.

Message CodeFeedback Messages
Updated Feedback Messages
DOC XA For Borrowers who receive income from dividends and interest and/or capital gains, document a two-year history of receipt of the income (i.e., signed complete individual federal tax returns for the most recent two-year period including Schedules B and/or D, as applicable) and sufficient assets remaining after closing to support continuance of the qualifying income for at least the next three years.
DOC 4V If using alimony, child support or separate maintenance payments to qualify, obtain copy of signed court order documenting payor’s obligation to Borrower for previous six months and evidence payor is obligated to make payments to Borrower for next three years. File must contain proof of consistent receipt for total court ordered amount for most recent six months.
DOC X3 For Borrowers who receive income from commissions, document a two-year consecutive history of receipt of the income (i.e., signed complete individual federal tax returns, including Schedule A, for the most recent two-year period). Also provide written Verification of Employment (VOE) covering most recent two-year period, or most recent year-to-date paystub(s) covering at least 30 days of income and most recent two years W-2s. The income must be likely to continue for the next three years.

DOC X5

For Borrowers who receive income from bonus, overtime, tips, and/or second or additional jobs, document that the Borrower has a two-year consecutive history of receipt of the income (i.e., written VOE covering the most recent two-year period or the most recent YTD paystub(s) covering at least 30 days of income and the most recent two years W-2s). The income must be likely to continue for the next three years.
DOC X7 For borrowers who receive income from notes receivable, document Borrower has a one-year consecutive history of receipt of the income (i.e., copy of the note and proof of receipt of payments in accordance with the terms of the note for the most recent one-year period). The income must continue for the next three years.
DOC CL For all income, including income topics such as retirement, long-term disability, temporary leave, public assistance, military reserves, mortgage differentials and assets as a basis for mortgage qualification, refer to the Freddie Mac Single-Family Seller/Servicer Guide, Chapter 37.  The guidance includes income topics referenced within the existing LPO messages as well as all other income topics.
DOC EW Seller is responsible for documenting and underwriting all Mortgages in accordance with the requirements of the Single-Family Seller/Servicer Guide and/or Master Agreement.

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