The borrower is a Trust and owns the real estate. An application was completed on the two Trustees and government monitoring information was taken. (The application shows "trustees" after their name.) We have income documentation in file and debt ratio forms etc. on the Trustees. The loan officer said she used the income to make the credit decision. Do I report the income even though the borrower is a Trust? Do I report the government monitoring information on the LAR on the Trustees?

Who were your borrowers? Sounds like it was the individuals if you used their income to qualify. We do that here to comply with FHMA guidelines. We have the borrowers sign as both individuals and trustees of the trust in order to perfect the lien. I report GMI on the individuals.

To be honest, I've never understood the whole 'Borrower is the Trust' bit. The Trust has no income or credit history so how could it be the borrower? The title to the property can be in the trust which would necessitate the trustee agreeing to a mortgage being placed on the property much the same as I have to agree to my husband borrowing against our home by signing off on the mortgage.

As TR mentions, it depends on your deal.

If the trust is the borrower and you approved based upon income of the trustees, they should be guarantors or co-borrowers from a credit perspective.

If the trustees are guarantors, you do not report their income. If they are co-borrowers, you do report.

If you do not have the trustees on the deal in any fashion, income is NA for the trust just as it would be if the trustees are guarantors.