Michigan Mortgage Verification of Deposit Form

Purpose: The VOD is a document that is used to verify the amount of money that a borrower has on account, the balance of any debt, and the repayment terms of that debt with a financial institution. The funds on account must be verified in order to determine whether the borrower has sufficient funds to close the loan transaction.

If not, a borrower explanation is needed to clarify why the information is different. Minor differences in account balances in account balances may be normal (e.g. recent paycheck deposit).

The source and amount of borrower cash and other borrower funds must be verified.

The established of a savings pattern is a strong indicator of the borrower’s cash management ability. In addition, verification of funds permits the lender to determine borrowed or gifted funds.

• Additional Information
• Clarification
• Borrower Explanation

Delivery
Mail the VOD directly to the financial institution. Do not give it to the borrower or another party to deliver. This procedure will prevent alterations to the document and minimize chances of receiving fraudulent information.

Average Balance
Frequently, the average balance section of the verification of deposit form is not completed by the verifying institution. To ensure that the underwriter has complete information regarding deposits, request account statements for the previous two months from the borrower.

Time Management Tip
To save time during the processing cycle, the account statements can be requested from the borrower at time of application.

Date Account Opened
Review the verification of deposit form for the date the account was opened. If the account has been open for only a short time, the borrower should disclose the source and provide evidence of the funds used to open the account.

Gifts
If the borrower has received a gift to help close the mortgage transaction , a gift letter must be included in the loan package. This letter should state that repayment by the borrower is neither required nor expected.

Sales
If an increase in a depository account is due to the sale of an item (e.g., furniture, motorcycle, etc.), proof of the sale should be included in the loan package.

Borrowed Funds
Borrowed funds may be used for the mortgage transaction provided the money comes from a secured loan other than a lien on the subject property, Unsecured loans are not acceptable.

Outstanding Loans
If the borrower currently has a mortgage loan or other installment debt, verification of that debt payment history is essential to the underwriting process. Direct verification from the lender usually contains the payment history information that is often not provided in a credit report.

Sizable Recent Deposits
The source of funds for large, recent deposits should be disclosed by the borrower. The deposit may in actuality be a gift or an unsecured, unreported loan.

Document Alterations
Deposit verifications with apparent alterations such as white-outs or crossed-out figures require further clarification. A follow-up phone call to the depository to re-verify the figures is a good procedure to follow.

Signed / Dated
The Verification of Deposit form must be signed and dated by a qualified representative of the institution.