Reverification of Occupancy Processes and Procedures

This guide outlines the processes and procedures for reverifying occupancy during loan origination and quality control (QC) to minimize risk and ensure high-quality loans. It emphasizes the importance of a strong QC environment that helps lenders identify discrepancies and red flags related to occupancy status. The document details the three types of occupancy—principal residence, second home, and investment property—each associated with varying levels of risk. It also discusses the implications of misrepresenting occupancy status, such as financial losses for stakeholders. Additionally, the guide identifies potential red flags that may indicate inaccuracies in occupancy disclosures and suggests methods for investigating these inconsistencies. These methods include reviewing insurance policies, verifying lease agreements, and conducting internet searches. The document concludes with recommendations for creating a culture focused on loan quality and continuous improvement, highlighting the need for regular training and internal procedures to address occupancy misrepresentation.