Thursday I began this series "Questions That Must Be Asked ............ Declarations Section VII Of Loan Application" which is a follow up to a blog I did on Tuesday about the need for Buyers to be Pre-Approved for a loan "Mortgage/Loan Programs with Low or No Downpayment Still Available In Connecticut ..... Pre-Appoval Letter", and the process that should be followed. In Pre-Approving a Buyer it is EXTREMELY IMPORTANT that the Loan Officer not just look at Credit and Income, or even collect documentation to verify the information that they were given, they have to complete a full Loan Application (1003). Without completing a FULL APPLICATION, mistakes are very likely to happen, because each page of the 1003 has questions if not answered can create surprises and huge problems later on.
As I stated Thursday one of the pages of the Loan Application (1003) that unfortunately does not get the full attention that it deserves, and taken for granted by many Loan Officers, is the Declarations Section VII of Page #4. Each question on the Declarations Section VII Of Loan Application only requires a YES or NO answer, and maybe that is why it does not seem to be given the same level of attention as other parts of the Loan Application. Since
Thursday I have covered the first 9 question on Declarations Section VII Of Loan Application, and today I will cover the next 2 questions, and continue to explain why these Questions Must Be Asked On The Declarations Section VII Of Loan Application and there importance. The tenth question on Declarations Section VII Of Loan Application states:
- j. Are you a U.S. Citizen?
This is a very simple question, either you are or you are not a U.S. Citizen, but even here I have had Borrowers not answer this question truthfully. This information is not as easy to verify as the previous questions, but if an Underwriter suspects that the Borrower is not telling the truth, they will investigate. The last time that one of my Borrowers answered this question incorrectly, it created a huge problem for everyone. It turned out that the Borrower did not answer this question truthfully because he did not have a valid Green Card, and thought that he could get around that issue by stating that he was a Citizen. The loan ended up being denied, the Borrower was out the money he had paid for a Home Inspection, Appraisal, Loan Application Fee, and deposit on the Sakes Contract. The Seller waisted almost five weeks that his house was off the market, therefore, missing out on other possible Buyers. And the Realtor, who was on both the Selling and Buying side spent a lot of time for no compensation. Charges could have been brought against this Borrower, because he signed at the bottom of Page #4 attesting that all of the information that they have provided is the truth to the best of their knowledge, but we did not press charges.
- k. Are you a permanent resident alien?
This question goes hand in hand with the previous question. If the Borrower is not a U.S. Citizen, then hopefully he/she is a permanent resident alien. But as you can see in my previous example, that is not a given. If a Borrower is a permanent resident alien, he/she will need to provide a valid permanent resident alien card (Green Card. I don't know why they still call it a Green Card, because it is no longer green) with a valid date for at least 12 more months and their status (card) needs to have been renewed at least once. The Non U.S. Citizen will also have to provide a Passport and Social Security Card.
I will end this series with the next blog on the final two question on the Declarations Section VII Of Loan Application. Hopefully this series is providing some insight into areas of the Loan Process that are not as well know outside of the Lending side of the process of purchasing a house, and making everyone more aware of why these Questions Must Be Asked On The Declarations Section VII Of The Loan Application.
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Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com
Incredible. I think it would take at least a day to answer all of these questions. It seems the form is twice as long as when we bought in '97.
George,
The citizenship question is very straight-forward, however there are mortgage applicants who try to bluff it for various reasons. The consequences can be harsh.
Isn't it amazing that a question as simple as "Are you a US citizen" could become so complicated.
George - You covered everything in this series. These questioned regarding citizenship is very important in the present environment.
Joan, these are all question that should be simple to answer as long as they answer them truthfully there is not problem.
Esko the guy that I used in my example did just that, but it was found out in the end. But everyone waisted a lot of time before the truth came out.
Marchel. not being truthful created lots of problems, and unfortunate some people keep on trying to con the system.
Jennifer, they started to pay a lot more attention to this after 9/11