Employment Verification Letter for Bank Loans

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Employment Verification Letter for Bank Loans Powered By Docstoc
					                                   Supporting Documentation
                                        and Verification
                                      quick reference guide
64898A0510




             Broker use only
             Not for distribution to customers
             Version 1.0 (May 2010)
                                    Homeside Supporting Documentation & Verification Quick Reference Guide
   These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                    Additional Requirements for
      Type                                         Verification Requirements
                                                                                                                                    Genworth LMI Insured Loans

                                                                             Income Verification

                    New to bank customers
                    One of the following:
                     Two most recent (consecutive) computer generated payslips, including ABN (the latest one
                     no more than one month old)
                     A recent non-NAB account statement showing the last 2 payment credits and employer’s
                     name (Note: Internet Banking statements are not acceptable);
                                                                                                                For ALL PAYG borrowers
                    OR Both of the following:                                                                     As per standard Homeside requirements
Full Time and        Signed letter from the employer (on company letterhead) confirming the customers             Where bank statements are used to verify income at least 3 months
Part Time            employment status (eg: full time, part time, casual); start date, base income.               statements are required
Employment           1 payslip (showing both the employer and employee name) or 1 payment credit showing the
(PAYG)               employers name on a bank statement where either document is not more than one month
                     old as at the application creation date.                                                   Second Job
                                                                                                                  Minimum 12 months in current employment
                    NB: If the employee is related to the employer, then an ATO notice of assessment or Group
                    Certificate is an additional requirement.

                    Existing Homeside or NAB Customers
                      Same as for new customers OR
                      Income credited to a NAB account showing the last 2 salary payments and employer’s name

Casual                Same as for Full Time Employment PLUS
                                                                                                                  Minimum 12 months in current employment
Employment            Copy of Group Certificate or ATO assessment notice for last financial year

                    New Customers to Homeside or NAB (all of the following items)
                     Copy of last 6 months payslips or statements showing regular income from bonus or
Commission,          commissions
                                                                                                                  Overtime, shift work allowance - acceptable if payment is regular and a
                     A letter from the employer detailing employment type and wage structure
Bonuses,                                                                                                          condition of employment (max 50% allowance)
Overtime,                                                                                                         Commission, Bonuses – case by case
                    Existing Homeside or NAB Customers (all of the following items)
Allowances            Income credited to a NAB account showing the last 6 months payment credits and
                      employer’s name
                      A letter from the employer detailing employment type and wage structure




For broker use only, not for distribution to customers                                                                                                                        Page 1 of 7
Version 1.0 (May 2010)
                                     Homeside Supporting Documentation & Verification Quick Reference Guide
   These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                        Additional Requirements for
      Type                                          Verification Requirements
                                                                                                                                        Genworth LMI Insured Loans

                                                                                                                      At least 2 financial years trading in the current business.
                                                                                                                      Where a borrower only has 12 months trading in the current business
                      Borrowers can be individuals or non-trading entities
                                                                                                                      and 2 years in previous employment within similar occupation/field, the
                      Discretionary Trusts only (eg. Family Trusts) can be accepted
                                                                                                                      application may be considered as an exception.
                      As a general ‘rule of thumb’ income will be averaged over the 2 yrs, unless the most recent
                                                                                                                      Where taxable income has increased over the last two years by more
                      year is less than the previous. In this instance, the most recent year’s income is used.
                                                                                                                      than 20%, then maximum of 120% of the previous year’s income must
                      Interim financials are unacceptable
Self-Employed                                                                                                         be used.
                      All businesses tax returns that clients are a party to are to be supplied – not just the
                                                                                                                      Registered ABN for min 2 years
applications –        borrowing entity
                                                                                                                      Registered for GST for min 12 months
General                                                                                                               Accountant’s details clearly stated on docs
Guidelines          Acceptable Net add-backs
                     Depreciation
                                                                                                                    Acceptable LMI add-backs
                     Interest and leasing expenses
                                                                                                                     Interest paid on debt being refinanced only
                    Acceptable Gross add-backs
                                                                                                                    Unacceptable LMI add-backs
                    Superannuation paid to the borrowers (over and above the 9% compulsory contribution)
                                                                                                                     Depreciation
                                                                                                                     Tax deductibility on investment loans (negative gearing benefit)


                      Copy of last 2 years Individual tax returns for all self-employed borrowers
Sole Trader /         Copy of last 2 years Business tax returns (eg Partnership/Company/Trust)
                      Copy of last 2 years financials i.e. profit & loss and balance sheet
Partnership /         Copy of last 2 years Individual tax returns for all partners; directors and shareholders;
                                                                                                                    As per standard Homeside requirements
Company / Trust       trustees and beneficiaries who are borrowers on the loan
                      Copy of Trust Deed (if application in the name of the Trust)


                      Shareholding certificates/statements/ notices
                      A letter from a NAB Group Financial Planner
Shares,               Shares are valued using the current ASX share price
                      Income level must be evidenced over the past 2 years                                          Investment income (interest, dividends) – acceptable if proven consistent
Dividends,
                                                                                                                    over the past 2 years
Managed             Can be considered only when:
Investments etc      the company is publicly listed;
                     the investment is current at the time of the application
                     As per Homeside guidelines




For broker use only, not for distribution to customers                                                                                                                            Page 2 of 7
Version 1.0 (May 2010)
                                    Homeside Supporting Documentation & Verification Quick Reference Guide
   These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                    Additional Requirements for
      Type                                         Verification Requirements
                                                                                                                                    Genworth LMI Insured Loans

                    Proposed (new) rent
                      Current bank statement showing direct credits identifiable as rental income, OR
                      Current lease agreement, OR                                                                 High density and/or inner city apartments - 50% of rent
                      Real estate agents appraisal                                                                Where significant portion of borrower’s income is derived from rent and
                                                                                                                  the proposal is heavily reliant on rent, the application may be considered
                    Existing rent                                                                                 too rent reliant.
Rental income         Current bank statement showing direct credits identifiable as rental income, OR             Level of gross rental accepted for servicing should not exceed:
                      Current lease agreement OR                                                                   - 40% of gross salary or wage for incomes less than $60,000
                      Real estate agents appraisal                                                                 - 65% for incomes $60,000 - $100,000
                                                                                                                   - 70% for incomes greater than $100,000
                    Unacceptable rental income
                     Income from boarders

Government                                                                                                        Accepted where considered permanent for next 5 yrs
Allowances            A current Centrelink statement showing name of customer, frequency and amount
                      A current bank account statement showing direct credits identifiable as income stated     Not accepted
(including Family                                                                                                Unemployment benefit
Allowances &        Can be considered only when the income is regular and of consistent amounts                  Workers Compensation
Pensions)                                                                                                        Sickness benefits

                      A superannuation fund statement
                      A bank account statement showing the regular receipt of an allocated pension or income
Superannuation        from the superannuation investment
                                                                                                                Not applicable to Genworth
                      A letter from a NAB Group Financial Planner

                    Considered when:
                     The maintenance agreement is registered with the Child Support Agency
Child Support/
                     Six months consistent payments can be evidenced via the borrower’s bank account
Maintenance          statements and
                     It is considered permanent for the next five years

                    Borrowers are assessed under standard guidelines when they are:
Overseas              Australian citizens living overseas
                                                                                                                Borrowers assessed as Non-Resident/ Overseas:
                      Foreign applicants who reside in Australia and have 2 yrs Aust tax returns or spouse is
Borrowers/ Non-                                                                                                   Any person without permanent residency status, and/or
                      Australian Citizen
Residents                                                                                                         Any person who resides and is employed in another country.
                      New Zealand citizens living and working in NZ or permanent residents of NZ
definition etc                                                                                                    Max LVR 80% to $500,000 and 75% between $500,000 & $750,000
                      Where one borrower is a citizen or NZ and the other borrower is a non-resident as per
                      above definition, proposal will be assessed as per Standard LMI Underwriting Policy




For broker use only, not for distribution to customers                                                                                                                         Page 3 of 7
Version 1.0 (May 2010)
                                    Homeside Supporting Documentation & Verification Quick Reference Guide
   These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                    Additional Requirements for
      Type                                         Verification Requirements
                                                                                                                                    Genworth LMI Insured Loans

                      Acceptable evidence of income                                                             Genworth non-resident policy applies
                      Foreign income will be converted into Australian dollars (AUD) using NAB exchange rates   When non-rental income cannot be adequately verified, 100% of gross rent
Overseas Income       (contact your SRM for current rate)                                                       for the security property must be sufficient to cover proposed mortgage
                      Written evidence that Foreign Investment Review Board approval has been granted           loan repayments (calculated at Genworth’s servicing rate)


                                                                                       Assets

                                                                                                                  Evidence of genuine savings required where LVR > 90%
                                                                                                                  Copy of last 3 months bank statements (in borrowers name) showing
                                                                                                                  transactional history
                                                                                                                  Term deposits (in borrowers name) held for 3 months or more

                                                                                                                Other acceptable alternatives considered are:
                                                                                                                  Where savings have been sacrificed by making accelerated loan
Genuine Savings                                                                                                   repayments over the last 3 months, the existing savings plus the value of
                                                                                                                  excess repayments must be equal to or greater than the minimum
                                                                                                                  savings required.
                                                                                                                  Real estate agents confirmation of customers rental repayment history
                                                                                                                  Shares etc - Documents evidencing ownership for a period of at least 3
                                                                                                                  months
                                                                                                                  Rates notice and loan statement (if applicable) if equity in other real
                                                                                                                  estate is being utilized.

Non-Genuine           Letter from donor confirming any contributions are non-repayable gifts
Savings               Evidence of Inheritance and when received




For broker use only, not for distribution to customers                                                                                                                        Page 4 of 7
Version 1.0 (May 2010)
                                     Homeside Supporting Documentation & Verification Quick Reference Guide
    These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                        Additional Requirements for
       Type                                         Verification Requirements
                                                                                                                        Genworth LMI Insured Loans

                      The assets we require to verify are those being used as the customer’s contribution to the
                      purchase including deposit paid, sale of asset proceeds, cash or funds held in bank
                      accounts.
                      Savings being used as funds to complete require verification i.e. ownership and value of the
                      customers contribution to any purchase (including deposit paid, sale of asset proceeds,
                      cash or funds held in bank accounts).

                    Genuine Savings must be held in the borrowers name and include:
                     Funds held or accumulated in savings accounts for 3 months or more
Evidence of funds    Equity in residential property
to complete          Term deposits held for 6 months or more
                     Shares held for no less than the last 3 months

                    Documentation to verify Genuine Savings include:
                     Copy of last 3 months bank statements (in borrowers name) showing transactional history
                     Loan statements showing accelerated payments
                     Term deposits certificates(in borrowers name) held for 6 months or more
                     Any lump sum or unusual deposits to be accompanied by a satisfactory explanation
                     Rates notice if equity in other real estate is being utilized
                     Shares etc - Documents evidencing ownership for a period of at least 3 months

                                                                                     Purchases

                      Copy of Contract of Sale signed and dated by all parties (Exception: NSW properties.
Contract of Sale      Contract of Sale signed and dated by purchaser only is acceptable)


                      FHOG application form
                      Original addendum for additional grant for new properties, and statement/letter from vendor
                      or builder to confirm that property has never been occupied (as applicable by state)
FHOG                  If FHOG is needed as evidence of funds to complete, a faxed copy of FHOG form is
(if applicable)       required prior to Unconditional approval

                    To load FHOG: original FHOG form certified ID and certified contract of sale is required (faxed
                    copies not acceptable). FHOG will only be loaded after loan is unconditionally approved / prior
                    to settlement.




For broker use only, not for distribution to customers                                                                                                      Page 5 of 7
Version 1.0 (May 2010)
                                     Homeside Supporting Documentation & Verification Quick Reference Guide
   These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                Additional Requirements for
      Type                                           Verification Requirements
                                                                                                                                Genworth LMI Insured Loans

                                                                                     Refinances

                    New NAB/Homeside Customers (or adverse credit history)
                     Copy of last 6 months statements for ALL loans being refinanced                           Copy of last 6 months statements for ALL credit cards being refinanced
                     Copy of last 6 months statements for ALL credit cards being refinanced – first page       – All Pages required
Full Doc Loans       (showing limit and balance) required.
                     Internet banking statements can be used in conjunction with loan statements providing
                     account name and number matches.

Full Doc to           Copy of last 6 months statements for ALL loans (regardless if being refinanced)
                                                                                                               Copy of last 3 months credit card(s) statements
Low Doc Loans         Copy of last credit card(s) statement for ALL credit cards
Low Doc to
                    Not Accepted - Homeside/NAB do not refinance Low-Doc Loans
Low Doc Loans

                                                                             Construction Loans

All Loans             LVR is calculated based on the lower of valuation or land + building contract
                      Executed Fixed Price Building Contract by a licensed builder
                      Full plans and specifications

Construction Only   Prior to First Drawdown
                      Council Approved Plans
Loans
                      Builder “All Risk” construction and Public Liability
(ie. no refinance
component)          Certificate of currency for Insurances
                     Builders Insurance of the works (also known as Construction Works Insurance)
                     Home Warranty Insurance (not required for properties in WA)
                     Public Liability insurance
                     As per Construction Only Loan PLUS
Construction                                                                                                 For new and existing customers
                    New customers (or with adverse credit history)
Loan with                                                                                                      Copy of last 6 months statements for loans being refinanced
                      Copy of last 6 months statements for loans being refinanced
refinance                                                                                                      Max LVR – 90%
component           Existing customers
                      Copy of last 3 months loan statements

Owner Builder       Homeside – No Owner Builder loans accepted




For broker use only, not for distribution to customers                                                                                                                       Page 6 of 7
Version 1.0 (May 2010)
                                    Homeside Supporting Documentation & Verification Quick Reference Guide
    These are the minimum verification requirements only. Full Doc loans over 80% LVR and Low Doc loans between 60 to 80% LVR require Lenders Mortgage Insurance (LMI)
                                                                                                                                       Additional Requirements for
      Type                                         Verification Requirements
                                                                                                                                       Genworth LMI Insured Loans

                                                                                 Low Doc Loans

                                                                                                                      ABN for at least 24 months
                      Completed and signed ‘Low Doc Loan – Declaration by Self-Employed Applicant”
                                                                                                                      Existing loan must have been operating for at least 6 months
                      If customer has existing loans, then last 6 months statements are required for ALL loans OR
                                                                                                                      Existing loan must be insured by Genworth Financial
                      If customer has no existing loans - last 3 months statements for all transaction accounts
                                                                                                                      GST registration for at least 12 months
                      showing income credits from business activities
Low Doc Loans                                                                                                         BAS Statements for last 12 months - obtained from the ATO showing a
                      Copy of last credit card(s) statement for ALL credit cards
                                                                                                                      lodgement receipt number
                      Rental income that business derives - declare as part of the income in the Low Doc
                                                                                                                      BAS statements will be required for each trading entity the client has
                      Declaration Form
                                                                                                                      Last 6 months Personal Transaction account statements (for the primary
                      All ‘other income’ (eg. extra income sources such as rent received that individuals derive) -
                                                                                                                      account only)
                      to be included separate to Low Doc Dec


                                                                     Other Verification Documents
                      Copy of completed Rate Lock Agreement - signed and dated
Rate Lock Form
                      Direct Debit Request form
                                                                                                                      Standard loans 85% - 90% cash out component is limited to 20% of the
                      Documentary evidence is required to verify a min of 80% of loan purpose
Loan Purpose /                                                                                                        security value
                    NB: If cash out exceeds 20% of loan amount, then documentary evidence is required to certify
Cash Out                                                                                                              Low Doc loans 70% - 80% cash out component limited to 20% of the
                    purpose of funds)
                                                                                                                      security value




For broker use only, not for distribution to customers                                                                                                                          Page 7 of 7
Version 1.0 (May 2010)

				
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Description: Employment Verification Letter for Bank Loans document sample