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What form do we provide to lender/ servicer if the borrower is only paid in cash and the employer refuses to pay in check or provide paystubs

JKennedySLG · Posted: Tue Oct 20, 2009 11:58 am Post subject:

If you are attempting to do a Full Documentation Loan with a cash-only job you are going to have an issue. Do you have anything to support this borrowers income, such as tax returns. What type of business is the borrower in that they only receive cash?

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Its for a loan modification, and the borrower does field work, the borrower is my father. Is it true that a VOE form will work

jenkin7 · Posted: Wed Oct 21, 2009 12:08 am Post subject:

Hi Sunny,

As James stated, it is not going to be easy for your father to qualify for a full documentation loan. A verification of employment from his employer can help, but it is up to the lender if they will consider the VOE only to offer the loan. He needs to talk with his lender regarding this. He can also look for stated income loans. Though these loans are rare these days, there are still some lenders in certain areas who offer such loans.

jveenstra · Posted: Wed Oct 21, 2009 8:48 am Post subject: Paid Cash

The borrower is paid cash and is in the process of a loan modification??

If that is the case, refinancing is not an option if the mortgage is presently late and/or credit is not so good.

I guess it is possible that one could be trying for a loan modification and everything is still ok as far as credit score and mortgage payments always on time. That is just not usually the case.

If you are in process of a loan modification, you are dealing with the existing servicer of the loan, and, no one else.

There is a form, Verification of Employment (VOE), that can be completed by the employer. That used to be ok by itself sometimes. These days, copies of pay stubs and W2s are usually required additionally. Often, employers who pay cash refuse to complete the form---they think it may get them in trouble with the IRS by putting in writing something they are doing and avoid paying taxes on the income they are paying to someone.

ONLY THE SERVICER can tell you if they will accept a VOE by itself with no other back up documentation. It does not matter if any other lender in the world will accept a VOE by itself. You are doing a loan modification and ONLY the servicer, not us or anyone else, can tell you what they will accept.

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Borrower is only paid in cash, servicer is requiring paystub