B3-4.2-01, Verification of Deposits and Assets (05/04/2022)

The lender can use any of the following types of documentation to verify that a borrower has sufficient funds for closing, down payment, and/or financial reserves:

• Request for Verification of Deposit (Form 1006). The information must be requested directly from the depository institution, and the complete, signed, and dated document must be sent directly from the depository institution.

• Copies of bank statements or investment portfolio statements. All statements must:

  • clearly identify the financial institution,

  • clearly identify the borrower as the account holder,

  • include at least the last four digits of the account number,

  • include the time period covered by the statement,

  • include all deposits and withdrawal transactions (for depository accounts),

  • include all purchase and sale transactions (for financial portfolio accounts), and

  • include the ending account balance.

  If the lender is the holder of the borrower's account, the lender may produce a printout or other alternative verification of the asset(s) directly from its system. The printout or alternative verification is acceptable as long as all required data (above) is supplied and documented.

• Copies of retirement account statements. They must be the most recent statements, and they must identify the borrower’s vested amount and the terms. (See B3-4.3-03, Retirement AccountsB3-4.3-03, Retirement Accounts, for additional information.)

The number of required bank or investment portfolio statements varies per transaction type as shown in the following table.

If the latest bank statement is more than 45 days earlier than the date of the loan application, the lender should ask the borrower to provide a more recent, supplemental, bank-generated form that shows at least the last four digits of the account number, balance, and date. The statements may be computer-generated forms, including online account or portfolio statements downloaded by the borrower from the Internet.

Documents that are faxed to the lender or downloaded from the Internet must clearly identify the name of the depository or investment institution and the source of information—for example, by including that information in the Internet or fax banner at the top of the document.

If necessary, the lender must supplement these verifications by obtaining any missing information from the borrower or the depository institution.

See  B3-4.4-02, Requirements for Certain Assets in DUB3-4.4-02, Requirements for Certain Assets in DU, for additional information about documentation of assets for DU loan casefiles.

In addition, loans with assets validated by DU must comply with all requirements pertaining to the DU validation service. Compliance with the DU messages satisfies the requirement for documenting assets. This documentation may differ from the requirements described above. See  B3-2-02, DU Validation ServiceB3-2-02, DU Validation Service , for additional information.

• Direct verification by a third-party asset verification vendor. These verifications are acceptable as long as:

  • the borrower provided proper authorizations for the lender to use the verification method,

  • the verified information provided must conform with the information that would be provided on Form 1006 or on bank statements,

  • the date of the completed verification is in compliance with B1-1-03, Allowable Age of Credit Documents and Federal Income Tax ReturnsB1-1-03, Allowable Age of Credit Documents and Federal Income Tax Returns,

  • the lender has determined that the vendor maintains reasonable practices that ensure reliable and authorized verifications of deposit and asset information (see A4-1-01, Maintaining Seller/Servicer EligibilityA4-1-01, Maintaining Seller/Servicer Eligibility), and

  • the lender understands it will be held accountable for the integrity of the information obtained from this source.

Rather than having the applicant sign multiple forms, the lender may have the applicant sign an authorization form which gives the lender blanket authorization to request the information it needs to evaluate the applicant’s creditworthiness. (See  B1-1-02, Blanket Authorization FormB1-1-02, Blanket Authorization Form.) When the lender uses this type of blanket authorization, it must attach a copy of the authorization form to each Form 1006 it sends to the depository institutions in which the applicant has accounts.