Claiming With a No Win No Fee Company

WrittenBy:Chris Graft
A certified financial statement (also known as audited financial statement) is one thathas been reviewedby a certified public accountant (CPA) to ensure that the numbers reported inthe statement are accurate and are not subject to material errors or omissions. Because the accountant is writing a certification that he has reviewed the figures and found them to be accurate, he may incur liability if the figures in the financial statement turn out to be wrong.Because of the possible liability, many CPAs do not certify these statements anymore. Those that still prepare them charge alarge fee. For this reason, mortgage brokers and mortgage lenders are looking for reasonsnot to need one. There are two grounds for needing one: the state in which you are licensed requires them for proving your net worth or you wantto originate FHA loans.

Although the SAFE Actchanged many requirements forlicensing, there are still a number of states (i.e., New Jersey for mortgage lenders, Illinois for Residential Mortgage Licensees, California Residential Mortgage Lender Licensees) that require certified financial statements. You must provide such a statement asof the end of the mostrecent fiscal year. Some states do require a minimum net worth, other states do not. No matter in how many states you are licensed, you only need onecertified financial statement. The statement must be in.pdf format and must be uploaded through the NMLS.

The abilityto broker or originate FHA loans also comes with the requirement that you get a certified financial statement. If you are an FHA Loan Correspondent (also known as a mini-eagle), you should be aware that 2010 is the last yearthat FHA is approving your Loan Correspondent status. Starting in 2011,the investors towhom you will broker your loans will be responsible for the approval and oversight of you. Therefore, it is possible that each lender will have its own set of requirements. It is likely that many lenders will insist on certified financials so that they are more assured that you are not under-capitalized.

It is still required by the FHA thatmortgage lenders who are originating FHA loans have a required minimum net worth that mustbecorroborated by the submission of an audited financial statement.

Since government loans are a large percentage ofthe loans that arebeing originated these days, it is likely that the needfor (and expenseof) a certified financial statement is not going awayany time soon. Make sure that the cost of the statement is offset by the income you earn in the states that require it or by the FHA loans that you originate.