Employement Verification

[herdjohnson]

Hey guys, I had a quick question just to see if this had happened to anyone else. I bought my house last May from a bank here in town. Recently, this bank was bought by a larger institution. This new bank is now sending me letters that they're completing an audit of their mortgages and they need me to complete new authorizations of employment and some other pain in the butt forms where I'd have to drive downtown to HR.

Has anyone encountered this before? And they don't really have any action against me if I say "no", do they? It's not like they could take my house back - I've been here for 11 months!

[ua_guy]

If I recall, I think we were the subject of an audit like that at one point after a mortgage refinance. It wasn't a big deal as everything on our application was truthful, just a nuisance to complete the paperwork/verification. You might want to re-read some of your mortgage docs because there's sometimes provision for this sort of thing in there. I believe their recourse is to call the loan (i.e. make the full balance due, immediately) if there is material misrepresentation on the application and supporting docs.

[herdjohnson]

If I recall, I think we were the subject of an audit like that at one point after a mortgage refinance. It wasn't a big deal as everything on our application was truthful, just a nuisance to complete the paperwork/verification. You might want to re-read some of your mortgage docs because there's sometimes provision for this sort of thing in there. I believe their recourse is to call the loan (i.e. make the full balance due, immediately) if there is material misrepresentation on the application and supporting docs.

There was no misrepresentation - I have just changed jobs since then (to a higher paying job). I'm sure there would be no issue, just seems like a pain. Also curious what would happen if we were both unemployed now, paying our bills out of our emergency fund?

[ua_guy]

There was no misrepresentation - I have just changed jobs since then (to a higher paying job). I'm sure there would be no issue, just seems like a pain. Also curious what would happen if we were both unemployed now, paying our bills out of our emergency fund?

I don't think they'd care so long as you hadn't missed a payment and your employment history verified as it was stated on the application, even if you termed employment since then. If you told them you were unemployed, they might steer you towards a mortgage assistance program, but that's about it...

[snafu]

I'm guessing there is a lot of new legislation and there are more stringent rules imposed on mortgagers as a result of the housing meltdown 2008-10. I suspect they are assessing their level of risk from this acquisition. The new institution is likely seeking to update their records as there is a lot of lobbying for even more stringent rules. Asking HR for a letter of employment confirmation is less of a hassle than having to get a mortgage from another lender if the loan is called. What is the advantage of getting on the wrong side of your mortgage holder?