Update:  Temporary Selling Guidance Related to COVID-19

March 30, 2020

Update:  Temporary Selling Guidance Related to COVID-19

Gateway First Bank Correspondent Lending continues to closely monitor the COVID-19 pandemic and will continue to provide updates and guidance during these challenging times.  Please see below updates to the temporary flexibilities Fannie Mae, Freddie Mac, FHA, VA and USDA have implemented in response to the COVID-19 developments:

  • Effective immediately Gateway First Bank is temporarily suspending the requirement for tax transcripts on all Fannie Mae, Freddie Mac, FHA and VA products including TXVLB, SETH Goldstar, CAFA Gold 100, and the GSFA Open Doors Loan Programs.  Please note that tax transcripts are still required for all USDA Loans or appropriate documentation of a lenders effort to obtain the tax transcripts, as part of their permanent loan file.  Clients are responsible for ensuring a executed 4506-T is included in the loan file for purchase according to current agency guidelines and signed by the borrowers.  We do highly recommend that tax transcripts be included as part of your post-closing quality control process.
  • Effective April 1st, 2020 Gateway First Bank will require all Verbal Verifications of Employment (VVOE) to be completed within three (3) business days of the Note Date on all Fannie Mae, Freddie Mac, FHA, VA and USDA products including TXVLB, SETH Goldstar, CAFA Gold 100, and the GSFA Open Doors Loan Programs.  This requirement includes all loans previously closed and submitted for purchase and new loan deliveries.  When a VVOE cannot be obtained, Gateway will accept one of the following alternative measures:

Fannie Mae & Freddie Mac

    • Email:  An email from the employer’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status.  Emails from the employer to the borrower which are then forwarded by the Client or Lender to Gateway will not be acceptable
    • Paystubs: A year-to-date paystub from the pay period that immediately precedes the note date is an acceptable alternative
    • Bank statements: Bank statements (or other alternative documentation as permitted by the agency guidelines) evidencing the payroll deposit from the pay period that immediately precedes the note date.

FHA Loans

  • Purchases: 
    • 2 months reserves of PITI AND
    • YTD paystub or direct electronic verification of income for the pay period immediately preceding the note date OR, a bank statement showing direct deposit from the borrower’s employment for the pay period immediately preceding the note date.
  • Refinances:
    • YTD paystub or direct electronic verification of income for the pay period immediately preceding the note date OR, a bank statement showing direct deposit from the borrower’s employment for the pay period immediately preceding the note date.

VA Loans

  • Both Purchases and Refinances:
    • Evidence of direct Deposit from a bank statement AND paystubs covering at least one full month of employment within 30 days of closing.  Must reconcile paystub and direct deposit listed on bank statement.  VA Underwriter must include remarks for using bank statement and paystub in VA Loan Analysis on what documentation was used in lieu of a VOE.
    • If bank statement/paystub verification cannot be obtained, borrower must have cash reserves of no less than 2 months PITI post-closing.   VA Underwriter must include remarks for using bank statement and paystub in VA Loan Analysis on what documentation was used in lieu of a VOE.

USDA Loans

  • Both Purchases and Refinances:
    • Email from the borrower’s work email address that identifies the name and title of the verifier and the borrower’s name and current employment status
    • If email cannot be obtained, the requirement can be waived when borrower has 2 months of cash reserves.

*Please note on all Loans:

  • Continuity of Income:  As a reminder correspondents are responsible for ensuring all borrowers are employed through closing.  It is strongly encouraged to confirm no disruption of borrowers’ employment (or self-employment) and/or income, and the Borrower’s ability to repay the loan is not impacted due to COVID-19.
  • Self-employed borrowers: Gateway will require verification/certification that the borrower’s business remains operational and must be completed within 10 business days of the Note date.
  • Reverifications:  For loans already closed and delivered to Gateway for purchase, if a verification has not been completed within three (3) business days of the note date, a reverification will be required prior to purchase.  Reverifications that are completed after closing but prior to Gateway purchase are acceptable in accordance with agency guidelines.

Please direct any questions to your Regional Sales Manager

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