FHA issued guidance on the use of third party verification (TPV) services to verify a borrower’s employment, income and asset information. FHA currently allows electronic verifications in lieu of written Verifications of Employment (VOEs) and Verifications of Deposit (VODs) in lieu of bank statements, but makes no specific reference to the use of TPV services to perform those functions. FHA also requires current employment income to be documented by obtaining borrower paystubs in addition to obtaining VOEs or Alternative Employment Documentation (W-2’s). Per the Mortgagee Letter, FHA revised its documentation requirements to allow the use of TPV vendors to verify information directly with borrowers’ employers or financial institutions without the need for additional documentation. The lender remains responsible for the quality of its FHA-insured mortgages and must ensure that the lender’s TPV vendors fully comply with all applicable laws and FHA requirements. The guidance is effective immediately.
State Compliance Summary
Tennessee Increases Permissible Interest Rate for Closed-end Loans under Industrial Loan and Thrift Companies Act
Tennessee passed a bill increasing the permissible interest rate for closed-end loans under the Industrial Loan and Thrift Companies Act (ILTCA). Under the bill, the
April 1, 2025
