Verifying Cash Value and Income of Stocks

The stock market has been volatile this past year. And as 2012 comes to an end, some of your residents may be assessing their portfolios. Some may have experienced significant reductions in the value of their stock portfolio and may be asking for interim recertifications. Others may have had the benefit of a positive swing in their portfolio's value or are enjoying more household income from dividends that cash-rich companies have increased as they've become more confident in the economy.

Especially in times of economic volatility, it's important to understand how to value your residents' stocks and assess the income derived from them. That's because you're required to determine the cash value of household assets and the income they produce every time you certify or recertify a household. And some of your residents' assets may include shares of stocks, and they may get income from those stocks in the form of dividends.

To comply with HUD's requirements on verifying assets, you must verify each stock's cash value and the amount of dividend income it will generate during the next 12 months. But getting the right information for your calculations can be a challenge if you don't know what the rules require when verifying stock asset value and income.

According to the income certification rules in HUD Handbook 4350.3, you should verify this information directly with the stockbroker who handles the household member's stock account [Handbook 4350.3, par. 5-13 (B)(1)]. This way you avoid having to make sense or rely on the authenticity of account documents that household members give you. But you need to make sure that the verification form you send asks for the right information to properly determine the stock's cash value and income.

To help you get the right information, here's a Model Form: Stock Asset and Income Verification, that you can use to get account information from stockbrokers:

https://www.assistedhousinginsider.com/sites/assistedhousinginsider.com/files/Dec2011_StockAsset_IncomeVerification.pdf