Does the lender remain responsible for the representations and warranties related to the borrower’s employment status when using one of the verbal VOE flexibilities?
Yes. The lender’s representations and warranties related to the borrower’s employment status do not change. We are allowing certain documentation flexibilities due to the unique circumstances resulting from the COVID-19 pandemic to address the issue lenders have raised due to disruption of employer operations and their inability to be reached by phone. Lenders are not required to use these flexibilities if they are not comfortable with them.
For more information, refer to the published Lender Letter LL-2020-03, Impact of COVID-19 on Originations.