The Mortgagee (lender) must verify and document the existence of the note. The Mortgagee must also verify and document the payments have been consistently received for the previous 12 months by obtaining tax returns, deposit slips or canceled checks and that such payments are guaranteed to continue for the first three years of the mortgage.
For HECM borrowers who have been and will be receiving a consistent amount of notes receivable income, the Mortgagee must use the current rate of income to calculate effective income. For HECM borrowers whose notes receivable income fluctuates, the Mortgagee must use the average of the notes receivable income received over the previous year to calculate effective income.
For additional information see Mortgagee Letter 2016-10 and the attached revised HECM Financial Assessment and Property Charge Guide, Sections 3.65 and 3.66 at https://www.hud.gov/program_offices/administration/hudclips/letters/mortgagee