#WednesdaysWisdom – It’s the New 1003 Week – Section 3 & 4 are broken down today! I have to say I really like the “chart” format to every section of the 1003 as I see it. It will require LO’s to ask more questions, and common things missed are listed as questions. I like it a lot. Today we start with section 3 and is the REO section. The instructions at the top of page 4 are just as the other sections, very easy to read and spell out what’s needed.
Section 3 starts off with the REO section of the home being refinanced first. (and is in bold) Otherwish if you do not own any Real Estate, check the box!
Section 3b is a continuation of the REO section for other properties, and so is 3C. Very simple page 5 of the new 1003, and is to detail REO’s owned.
And of course at the bottom of page 4 you have the borrower’s name the information is associated too! Now page 5 Section 4, the loan and property information. Again I like how it starts off and is self explanatory for instructions. The newest thing on here is a FOURTH option for occupancy. And then the 2 questions at the bottom of the first chart.
Then section 4b breaks down other loans on the property they are buying or refinancing. This includes seconds, hard money, or seller carry backs.
Section 4c breaks down rental income and would be filled in on any home that is a 2 unit or more. Primary or investment to indicate the expected monthly rental income. No you do not take 75% in this section, that the underwriter would do in their section for this, just list the full rent expected to be received.
The final section on page 5 is the break down on gifts for the transaction. I like the new 1003 in that it highlights the often missed items on the current 1003 now. This also is put together in a chart like format and gives examples, it’s like selling for LO’s. What a great reminder too.
And guess what’s at the bottom of page 5? You bet the borrower’s name at the bottom left that the information is applied too. I love this new 1003 and the more I analyze it the more I see how it brings to life the issues we have in loans and makes it more transparent for underwriting.
Ok, as I stated in today’s video, I’m in the office taking “I gotta guy” questions to help you bring a 1003 to life!
As Always –