Is the participant lender required to conduct any type of investigation before stating that the borrower is a skip?
Yes, the participant lender is required to conduct, at a minimum, a site visit — and a credit report should be pulled. A professional skip trace will often be appropriate, especially for larger loans. Often, a skip trace can be obtained economically by combining it with an asset search. The analysis of this investigation should be summarized in the wrap-up report, however, copies of the documentation do not need to be submitted.