Table of Contents
The Non Borrower Credit Authorization form plays a crucial role in the loan modification process for borrowers who receive financial support from individuals living in their household but not officially listed on the mortgage. This form is necessary when a borrower or co-borrower discloses that a non-borrower contributes to their total household income. A non-borrower is defined as someone who resides in the same home and helps financially but is not responsible for the mortgage. To ensure a thorough evaluation, each non-borrower must complete and sign the Credit Authorization Form. It is important to note that additional documentation may be requested during this process. If there are multiple non-borrowers contributing to the household income, copies of this form can be utilized for each individual. The form requires the non-borrower to confirm their occupancy at the property, acknowledge their contribution to the household income, and authorize the lender to obtain their consumer credit report. This authorization is essential for the lender to assess the mortgage loan modification request effectively, adhering to the Fair Credit Reporting Act.
Sample - Non Borrower Credit Authorization Form
To Be Completed if a
Household Member Who is Not on the Promissory Note
LOAN #: ____________________
Your Hardship Affidavit /Request for Modification or Uniform Borrower Assistance Form indicates that a non- borrower contributes to your total household income. For our purposes, a
Note: Updated or additional documents may be required. Copies of this form may be used if you have more than one
Please have the
The undersigned
1.I am an occupant of _________________________________________________________(the “Property”);
PROPERTY ADDRESS
2.I contribute to the total household income of the Property;
3.I understand and acknowledge that ___________________ is evaluating the mortgage loan that is secured by the Property for a loan modification.
4.I hereby authorize ___________________, or its designated agent, to obtain and review a consumer credit report containing my credit history and other
This Authorization shall constitute the undersigned’s agreement to allow ___________________ to obtain a
copy of a consumer credit report in the manner permitted by the Fair Credit Reporting Act.
_____________________________________ |
________________________________________ |
NAME |
SIGNATURE |
_____________________________________ |
________________________________________ |
RELATIONSHIP TO BORROWER |
DATE |
File Specs
| Fact Name | Details |
|---|---|
| Purpose | This form is used to authorize the evaluation of a non-borrower's credit history when they contribute to the household income. |
| Definition of Non-Borrower | A non-borrower is someone who lives in the home and helps with household income but is not responsible for the mortgage loan. |
| Required Signatures | Each non-borrower must complete and sign the form for it to be valid. |
| Additional Documentation | More documents may be needed beyond this form, depending on the evaluation process. |
| Governing Law | This form is subject to the Fair Credit Reporting Act, which governs how credit information can be obtained and used. |
Non Borrower Credit Authorization - Usage Guidelines
Filling out the Non Borrower Credit Authorization form is a straightforward process that requires careful attention to detail. This form is essential for ensuring that all necessary information is collected to evaluate a loan modification. After the form is completed, it will be submitted for review, and you may be asked for additional documentation if needed.
- Begin by locating the section labeled "LOAN #". Write the loan number associated with the mortgage in the space provided.
- In the "PROPERTY ADDRESS" section, fill in the complete address of the property where the non-borrower resides.
- In the first statement, the non-borrower should certify their status as an occupant. Write the name of the non-borrower in the space provided.
- Next, confirm that the non-borrower contributes to the total household income. This is typically a given but ensure it is acknowledged.
- In the following statement, indicate the name of the lender or entity evaluating the mortgage loan. This is crucial for the authorization to be valid.
- The non-borrower must then authorize the lender or its agent to obtain a consumer credit report. Ensure that the wording is clear and that the non-borrower understands this authorization.
- After completing the statements, the non-borrower should sign the form in the designated area, providing their name and signature.
- Next, indicate the relationship of the non-borrower to the borrower. This could be a spouse, partner, relative, or roommate.
- Finally, fill in the date on which the form is signed. This should be the date when the non-borrower completes the authorization.
- Provide the non-borrower’s Social Security number in the format indicated, ensuring accuracy to avoid any delays in processing.
Your Questions, Answered
What is the Non Borrower Credit Authorization form?
The Non Borrower Credit Authorization form is a document required when a borrower or co-borrower discloses income from a household member who is not listed on the mortgage. This form allows the lender to evaluate the household income by obtaining a credit report for the non-borrower. It ensures that all income sources are considered during the loan modification process.
Who qualifies as a non-borrower?
A non-borrower is someone who lives in the same household as the borrower but is not responsible for the mortgage. This individual contributes to the household income and is necessary for the lender to evaluate the overall financial situation of the household during the loan modification process.
Why is the Non Borrower Credit Authorization form necessary?
This form is necessary to obtain a consumer credit report for the non-borrower. The lender needs to assess the credit history of all income contributors to make informed decisions regarding loan modifications. It helps ensure that the financial evaluation is thorough and accurate.
What information is required on the form?
The form requires the non-borrower to provide their name, relationship to the borrower, property address, and social security number. Additionally, they must sign the form, indicating their consent for the lender to access their credit report.
Can I use a copy of the form if there are multiple non-borrowers?
Yes, you can use copies of the Non Borrower Credit Authorization form if there is more than one non-borrower contributing to the household income. Each non-borrower must complete and sign their own form to authorize the lender to obtain their credit report.
What happens after the form is submitted?
Once the form is submitted, the lender will review the credit reports of all non-borrowers listed. They will use this information as part of the evaluation process for the loan modification request. Be prepared for the possibility that additional documentation may be requested during this evaluation.
How does this form protect the non-borrower’s information?
The form includes a clause that allows the lender to obtain the credit report in compliance with the Fair Credit Reporting Act. This means the non-borrower's information will be handled securely and used only for the purpose of evaluating the mortgage loan for modification.
Common mistakes
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Incomplete Information: One common mistake is failing to fill out all required fields. Ensure that the loan number, property address, and social security number are complete and accurate.
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Missing Signatures: Both the non-borrower and the borrower must sign the form. Omitting a signature can delay the processing of your request.
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Incorrect Property Address: Double-check the property address provided. An incorrect address can lead to confusion and may result in processing delays.
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Not Specifying the Relationship: Clearly state the relationship to the borrower. This detail is important for understanding the context of the income contribution.
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Failure to Understand Authorization: Some individuals may not fully grasp what they are authorizing. It’s crucial to read and understand the implications of allowing access to your credit report.
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Neglecting to Update Information: If there are changes in circumstances or additional non-borrowers, be sure to update the form accordingly. Using copies of the form for multiple non-borrowers is acceptable, but each must be fully executed.
Documents used along the form
The Non Borrower Credit Authorization form is an essential document in the mortgage loan modification process, particularly when a household member who is not a borrower contributes to the household income. Along with this form, several other documents may be required to ensure a comprehensive evaluation of the loan modification request. Below is a list of forms and documents commonly used in conjunction with the Non Borrower Credit Authorization form.
- Hardship Affidavit: This document outlines the borrower's financial difficulties and the reasons for seeking a loan modification. It provides context to the lender regarding the borrower's current situation.
- Uniform Borrower Assistance Form: This form collects detailed information about the borrower's financial status, including income, expenses, and assets. It is used to assess eligibility for various assistance programs.
- Authorization to Release Information: This document allows the lender to obtain necessary financial information from third parties, such as banks or employers, to verify the borrower's financial situation.
- Income Verification Documents: These may include pay stubs, tax returns, or bank statements that confirm the income reported by the borrower and any non-borrowers contributing to the household income.
- Credit Report: A credit report provides a detailed history of the borrower's and non-borrower's credit activities. It is essential for the lender to assess creditworthiness.
- Loan Modification Request Letter: This letter formally requests the loan modification and explains the borrower's circumstances. It may accompany the other forms to provide additional context.
- Property Appraisal Report: An appraisal report assesses the current value of the property. This information helps the lender determine the equity available in the property.
- Debt-to-Income Ratio Calculation: This document outlines the borrower's monthly debts compared to their income. It is crucial for evaluating the borrower's ability to make modified payments.
- Proof of Insurance: Documentation showing that the property is adequately insured is often required to protect the lender's investment in the property.
- Loan Agreement: This is the original agreement between the borrower and lender outlining the terms of the mortgage. It may be referenced during the modification process.
These documents collectively assist in providing a clear picture of the borrower's financial situation and support the evaluation process for a loan modification. Each form plays a specific role in ensuring that all necessary information is available for the lender's review.
Similar forms
The Non-Borrower Credit Authorization form shares similarities with the Authorization to Release Information form. Both documents require an individual’s consent to share personal information, particularly related to financial matters. Just like the Non-Borrower Credit Authorization, the Authorization to Release Information is often used in mortgage applications and modifications, ensuring that relevant parties can access necessary data to evaluate a loan application. This document also emphasizes the importance of transparency in the financial evaluation process, allowing lenders to gather essential details about an applicant's financial situation.
Another document that aligns closely with the Non-Borrower Credit Authorization form is the Credit Report Authorization form. This form specifically allows lenders to obtain a consumer's credit report, similar to how the Non-Borrower Credit Authorization permits access to a non-borrower's credit history. Both documents serve as a safeguard for lenders, ensuring they have the necessary information to make informed decisions regarding loan modifications or approvals. They also highlight the importance of consent, as both require the individual to acknowledge and agree to the release of their credit information.
The Non-Borrower Credit Authorization form is also akin to the Income Verification form. This document is used to confirm an individual's income, which is crucial for assessing financial eligibility for loans or modifications. Like the Non-Borrower Credit Authorization, the Income Verification form requires the individual's signature and often includes details about their income sources. Both forms aim to provide a comprehensive picture of the household's financial situation, ensuring that lenders can accurately evaluate the applicant's ability to meet their mortgage obligations.
Additionally, the Non-Borrower Credit Authorization is similar to the Borrower’s Authorization for Third-Party Disclosure. This document allows borrowers to authorize lenders to communicate with third parties regarding their loan. While the focus is on the borrower, the underlying principle of consent and information sharing is consistent with the Non-Borrower Credit Authorization. Both forms facilitate necessary communication between the borrower, non-borrower, and lender, ensuring all parties are informed and involved in the financial evaluation process.
The Non-Borrower Credit Authorization form also resembles the Consent for Background Check form. This document is used to obtain permission to conduct a background check, which may include financial history, similar to the credit report access granted in the Non-Borrower Credit Authorization. Both forms emphasize the importance of consent and transparency in the evaluation process, allowing lenders to gather relevant information while respecting the individual's privacy rights.
Lastly, the Non-Borrower Credit Authorization form can be compared to the Financial Disclosure Statement. This document provides a detailed overview of an individual's financial status, including income, debts, and assets. Like the Non-Borrower Credit Authorization, it plays a crucial role in evaluating an applicant’s financial situation. Both documents aim to present a clear picture of the household’s financial health, assisting lenders in making informed decisions about loan modifications or approvals.
Dos and Don'ts
When filling out the Non Borrower Credit Authorization form, it’s important to follow certain guidelines to ensure accuracy and compliance. Here are some dos and don’ts to keep in mind:
- Do ensure all required fields are completed accurately.
- Do provide your full name as it appears on official documents.
- Do include the correct property address where you reside.
- Do sign and date the form before submission.
- Don't leave any sections blank; incomplete forms may delay the process.
- Don't use nicknames or abbreviations for your name.
- Don't forget to check the information for accuracy before submitting.
- Don't submit the form without understanding what it entails.
Following these guidelines will help facilitate a smoother evaluation process for your loan modification request.
Misconceptions
Here are nine common misconceptions about the Non Borrower Credit Authorization form:
- Only borrowers need to sign this form. This is false. Non-borrowers who contribute to household income must also complete and sign the form.
- This form is optional. In reality, it is mandatory for evaluating the mortgage loan when a non-borrower contributes to the household income.
- Non-borrowers will be held responsible for the mortgage. This is incorrect. Non-borrowers are not personally obligated on the mortgage loan.
- The form is only for primary borrowers. This is misleading. The form applies to any non-borrower residing in the home and contributing to the income.
- Completing the form guarantees loan modification. This is not true. The form is part of the evaluation process, but it does not guarantee approval.
- Non-borrowers do not need to provide personal information. Actually, non-borrowers must provide their Social Security number and other identifying information.
- All non-borrowers need to have a good credit score. This is a misconception. While credit history is reviewed, it is not the only factor considered in the evaluation.
- The form can be signed by anyone in the household. This is incorrect. Only those who contribute to the household income and reside in the home should sign.
- Once the form is submitted, no further information is needed. This is misleading. Additional documents may be requested during the evaluation process.
Key takeaways
Here are key takeaways about filling out and using the Non Borrower Credit Authorization form:
- Identify the Non-Borrower: Ensure that the individual completing the form is a non-borrower contributing to the household income.
- Complete Required Information: Fill in all sections of the form accurately, including the property address and the non-borrower's relationship to the borrower.
- Signatures Matter: The non-borrower must sign the form. This signature is essential for the authorization to be valid.
- Understand the Purpose: The form is used to obtain a consumer credit report to evaluate the mortgage loan for a potential modification.
- Multiple Non-Borrowers: If there are several non-borrowers, make copies of the form for each individual to complete.
- Compliance with Regulations: The authorization complies with the Fair Credit Reporting Act, ensuring that the non-borrower’s credit information is handled appropriately.
- Additional Documentation: Be prepared to provide updated or additional documents if requested during the evaluation process.
- Keep Records: Maintain a copy of the completed form for your records, as it may be needed for future reference.