What the Blanket Authorization Form Does
The Blanket Authorization form is your permission slip that allows your lender to dig into your financial life. When you sign this document, you give your lender the legal right to contact anyone who holds information about your money, employment, or credit history.
Think of it as a master key. Instead of asking you to sign separate authorization forms for your bank, your employer, your previous landlord, and your credit report, the lender gets one comprehensive authorization that covers everything they need to verify.
The form specifically authorizes your lender to verify your employment earnings, bank account balances, stock holdings, other assets, credit history, and rental payment history. It also allows them to order your credit report and contact previous mortgage lenders if you've owned a home before.
How Lenders Use This Authorization
Your lender attaches a copy of your signed Blanket Authorization form to every verification request they send out. When they mail a Form 1005 (Request for Verification of Employment) to your employer, your signed authorization goes with it. Same thing when they send a Form 1006 (Request for Verification of Deposit) to your bank.
The authorization serves as proof to these institutions that you've given permission for them to share your private financial information. Without it, most employers and banks won't respond to verification requests due to privacy laws.
Here's a key point: the completed verification forms must come directly from the institution back to your lender. Your employer can't hand you the completed employment verification to pass along. Your bank can't give you the deposit verification to deliver. The forms must be mailed or sent directly from the verifying institution to your lender.
Why This Direct Communication Matters
Fannie Mae requires this direct communication to prevent fraud and ensure the information is accurate. If borrowers could handle their own verification forms, there would be too much opportunity for tampering or falsification.
Say you're self-employed and claim to have $50,000 in business checking accounts. Your lender sends a deposit verification form to your bank along with your signed authorization. The bank must complete the form showing your actual account balances and send it directly back to your lender. You never touch the completed form.
This process protects both you and your lender. It gives the underwriter confidence that the financial information is legitimate and hasn't been altered.
What Information Gets Verified
The Blanket Authorization form covers a broad range of financial information. Your lender can verify your current and past employment, including salary, bonus history, and length of employment. They can check all your bank accounts, investment accounts, retirement accounts, and other assets.
The form also covers your credit history and allows the lender to pull your credit report. If you've been renting, they can contact your current and previous landlords to verify your rental payment history. If you've owned homes before, they can contact those mortgage companies to verify your payment record.
The authorization specifically states that this information can only be used for processing your mortgage application. The lender can't use it for marketing purposes or share it with unrelated third parties.
Common Issues and Timing Considerations
One challenge with the Blanket Authorization process is timing. Some institutions are slow to respond to verification requests, which can delay your loan approval. Banks typically respond within a few business days, but some employers take longer, especially large corporations with centralized HR departments.
If you work for a company that uses a third-party employment verification service like The Work Number, let your lender know upfront. These services can often provide instant verification, speeding up the process.
Some borrowers worry about privacy when signing such a broad authorization. Remember that the form includes language limiting the use of information to your mortgage application only. The lender can't use this authorization to monitor your accounts after closing or for any purpose other than processing your loan.
If you have accounts at multiple banks or credit unions, make sure you list all of them on your loan application. The lender needs to verify all accounts that you're using for down payment, closing costs, or reserves. Missing an account can cause delays when the underwriter discovers it later.
When Problems Arise
Sometimes institutions don't respond to verification requests, even with proper authorization. This happens more often with smaller banks, credit unions, or employers. If your lender can't get a response after multiple attempts, they may ask you to provide alternative documentation.
For employment verification, this might mean providing recent pay stubs, a letter from your employer, or tax returns. For asset verification, you might need to provide recent bank statements with specific documentation requirements.
If you've recently changed jobs or banks, make sure your lender has current contact information. Verification requests sent to old addresses or closed HR departments will bounce back, causing delays in your loan process.
The authorization form also covers situations where you might have had previous mortgages that were sold or transferred between companies. Your lender may need to track down payment history from multiple mortgage servicers, which can take time but is necessary for your approval.
References
For the official guidelines, see B1-1-02: Blanket Authorization Form in the Fannie Mae Selling Guide.
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Original Fannie Mae Guideline Text
B1-1-02, Blanket Authorization Form (04/01/2009)
Blanket Authorization Form
The lender obtains the borrower’s signature on the following Blanket Authorization form to obtain the documentation needed to evaluate the borrower’s creditworthiness.
This borrower-signed document gives the lender blanket authorization to request the information needed to document the borrower’s creditworthiness. I hereby authorize ****___**** (the “lender”) to verify my past and present employment earnings records, bank accounts, stock holdings, and any other asset balances that are needed to process my mortgage loan application. I further authorize **__** (the “lender”) to order a consumer credit report and verify other credit information, including past and present mortgage and landlord references. It is understood that a photocopy of this form also will serve as authorization. The information the lender obtains is only to be used in the processing of my application for a mortgage loan.
The lender attaches a copy of the Blanket Authorization form to each Form 1005 or Form 1006 sent to a verifying institution. The information must be requested directly from the institution. The completed form(s) must be signed and dated, and must be sent directly from the verifying institution.
