#Two4Tuesday – New 1003 Week – Today we break down section 2 of the new 1003! The flow of the URLA (Universal Residential Loan Application) has definitely changed.  But for the better, the instructions are more clear at the top of each page, and information flows nicely in each “charted” section for the borrower.  One thing that sticks out to me the most, is the “lists” of items and examples at the top of each charted section, is a great minder to all sales people what types of assets, liabilities, etc there may be.

Section 2 starts off with a nice instructional sentence at the top and moves right into assets first to list the total of value for that section.  Again note the lists that this chart shows.  Great sales tool in my opinion.

The section 2b is new, and is a great itemization to some of the most commonly missed items on the old 1003.  It points out “Other Assets” you have such as an EMD already in escrow, or sweat equity or rent credits or proceeds from a sale of a home.  See again the list above the chart.  Great section to be on the 1003 and good new edition.

Section 2c is the start for Liabilities and again I like the “chart look”.  What’s interesting is that Real Estate is excluded in this section specifically and you are to list all items as debts except mortgages in this section.  I wonder how the LOS systems out there will transfer over the debts into this form.

Page 3 is all Section 2, and ends with the “other liabilities” that are often missed to disclose, such as Alimony or Child Support, separate maintenance etc.  What sticks out to me again is the name at the bottom of the page 3 that identifies who is the borrower on this application.  Their name is to be there so the underwriters know which 1003 belongs to who.

As indicated yesterday there are a few extra forms on the application now.  In fact a second borrower has a complete separate application identified just for them.  You can see the identification of “Additional Borrower” on the 1003 for any co-borrower on a loan now at the bottom of all pages.  (where their name goes too) Another is the unmarried addendum that is needed if they selected unmarried and then a part of the 1003 that is actually filled out by the lender!

And the additional addendum for those that select unmarried in section 1.  ↓

I like the flow so far, but what it means in reality is the LO has to have more “apps” taken.  Meaning there is more forms to fill out a home loan application.  And more specific questions that need to asked and are pointed out inside the application in various sections.  Even a portion filled out by the lender.  Quite unique.  I would have these printed for the first several and go through them the long hand way to learn the new changes.  But that’s just me.

As I always indicate, being a master of your own craft starts with the heart of the transaction, which is what underwriters verify information off of, the 1003.  All LO’s need to know this like the back of their hand.

As Always –

#SellWell