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UG Updates Requirements

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United Guaranty has issued clarifying guidelines for verbal employment verifications, self-employed borrowers and borrower with prior bankruptcies.

The mortgage insurance company said that it had been deferring to Fannie Mae and Freddie Mac on requirements for verifications of employment.

But a recent announcement from Fannie, SEL 2012-04, indicated that lenders can alternatively obtain verbal verifications after a loan closes — a requirement that United Guaranty considers too risky.

So verbal employment verification on loans insured by the Greensboro, N.C.-based company will need to be obtained within 10 business days prior to the note date for employment income, according to a customer announcement issued Thursday.

On self-employed borrowers, verbal VOEs will need to be completed 30 calendar days prior to the note date.

United Guaranty issued a separate announcement today indicating that borrowers who own at least 25 percent of a business and use income from that business to qualify will need to be designated as “self-employed.” But if the business income is negative, the self-employed designation will not apply.

Another clarification from the mortgage insurer indicated that borrowers whose bankruptcy discharged more than seven years ago do not need to be designated as a borrower with a prior bankruptcy — even if the bankruptcy shows up on the credit report.

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