This topic contains information on asset verification for mortgages underwritten with DU, including:
DU analyzes the value of liquid assets entered in the online application in its risk assessment. Assets may be excluded from the online application if the borrower can qualify without them.
The online loan application provides the following categories of liquid assets: Bond, Bridge Loan, Cash-on-Hand (for HomeReady mortgages only), Certificate of Deposit, Checking Account, Gift, Gift of Equity, Money Market Fund, Mutual Fund, Net Equity, Other Liquid Asset, Retirement Fund, Savings Account, Secured Borrowed Funds, Stock, and Trust Funds.
DU does not consider the amount of non-liquid assets. Non-liquid assets do not have to be verified, and will not be identified in a verification message.
The online loan application provides the following categories of non-liquid assets: Cash Deposit on Sales, Net Worth of Business, and Other Non-Liquid Asset.
For loan casefiles underwritten with DU, DU will determine the reserve requirements based on the overall risk assessment of the loan casefile and the minimum reserves that may be required for the transaction. Reserves may be considered a compensating factor in DU's risk analysis, and may serve to improve the underwriting recommendation.
Refer to the following topics for additional requirements related to minimum reserves:
The DU Underwriting Findings report will identify the following values:
“Total Available Assets,” which is the total of all borrower(s)’ liquid assets entered into DU;
“Funds Required to Close,” which will include the cash needed to complete the transaction plus any debts marked paid by closing on purchase or limited cash-out refinance transactions, other than subject property mortgage(s);
“Reserves Required to be Verified,” which is the amount of reserves that must be verified;
“Total Funds to be Verified,” which is the sum of the “Funds Required to Close” and the “Reserves Required to be Verified”; and
“Excess Available Assets, not required to be verified by DU,” which are liquid assets that DU is not requiring the lender to verify.
The Excess Available Assets, not required to be verified by DU (Excess Available Assets) amount represents the amount of assets remaining after subtracting the Total Funds to be Verified from the Total Available Assets. Excess Available Assets do not generally need to be verified.
Assets that are owned by a non-occupant borrower can be included in the 5% minimum borrower contribution requirement (when applicable), and those funds must be entered in the online loan application. Total liquid assets for the occupying borrower and non-occupant borrower are included in DU’s calculation of total available assets.