[pcorder]

If a retirement account is listed under assets on the 1003, is there a requirement to obtain a verification of that specific asset? It’s not necessarily considered a liquid asset because the borrower has not reached retirement age yet, am I correct in assuming that?

I interpret the verification of assets to included “assets that the consumer will rely on to repay the loan”. It’s reasonable to assume when the customer reaches retirement age (in 6 or 7 years), they will rely on distributions from the retirement account to repay the loan.

Advice or thoughts please?

Thank you!

PS…we are a small creditor under the rule and do not follow Appendix Q.

[rcooper]

You’re correct, you only need to verify only what is relied on to determine the borrower’s ability to repay.

[pcorder]

Okay, so if we have listed the retirement account in assets on the loan application, but we are not using the retirement account as verification of repayment, and therefore not including it in the debt to income ratio calculation, verification would not be required? (I apologize for beating a dead horse, I just want to be sure I’m thinking about it in the correct way.)

Thanks for your help, Robin!

[rcooper]

That’s correct. Even if an particular asset is listed on the application by the borrower, if you aren’t relying the asset for repayment and that is reflected in your underwriting (as you mentioned) you don’t need to verify it.

[pcorder]

Excellent! Thank you!

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