Fannie Mae (FNMA-any loan that is run through DU-Desktop Underwriter-which includes Conventional AND FHA loans) no longer approves loans with just a Verification of Deposit (VOD). If we use a VOD we must also have a 30 day bank statement in file. Here’s the catch:
• If a bank statement shows ‘Large’ deposits (other than payroll) they MUST be explained and documented. (‘Large’ is a little interpretive: so it depends on borrower situation, but usually anything over $500-$1000)
• Also investor overlays are that if there are Overdraft or Non-Sufficient Funds on a bank statement that is in file – it shows a demonstration of living beyond their means and is an automatic ‘Decline’.
So the moral of the story is: Borrowers must provide 2 months of bank statements on EVERY file and we need to make sure that buyers and borrowers are aware that they will need to be on best behavior (no over drafts or NSF's) before they supply bank statements to the lender!