Lender's Questionnaire - Purpose
The lender will not tell you this, but there are two purposes behind the lender's questionnaire. The first is to obtain information about the association and loan applicant in order to assist the lender in making a loan underwriting decision. The other purpose is to transfer risk to the person signing the lender questionnaire as well as the association. Should the borrower fail a make any future payments on the loan, the lender will examine the lender's questionnaire in order to determine if any of the information was incorrect so they can claim a material misrepresentation was made or possibly fraud. This gives them the ability to file a lawsuit against the individual signing the questionnaire and/or the association to cover them for any losses the lender may suffer including the cost of repurchasing the loan if it had been sold to an investor.
It is for this reason that it is critically important for the person signing the lender's questionnaire to exercise great care and to be accurate.
HOA Financial Management Services