Thread Options
#1643954 - 12/28/11 08:37 PM Income: Application vs. Verification Docs
AuditorK Offline
Platinum Poster
Joined: Feb 2003
Posts: 961
PA
How worried do I have to be if the HMDA reported income on the LAR matches what is listed on the application, but the W-2s, paystubs, tax returns in file do not support the income amount on the application?

Return to Top
HMDA

   
HMDA Academy
#1643977 - 12/28/11 09:01 PM Re: Income: Application vs. Verification Docs AuditorK
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
You are supposed to report the income that was used. Can you locate that number in the file?
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top
#1644180 - 12/29/11 04:21 PM Re: Income: Application vs. Verification Docs Kathleen O. Blanchard
AuditorK Offline
Platinum Poster
Joined: Feb 2003
Posts: 961
PA
From the coversheet in the file, it appears that a third figure was used to calculate the DTI. So now I have one income figure listed on the application, a different amount evidenced from the tax returns/W-2s, and another amount shown in the DTI calculation.

Return to Top
#1644186 - 12/29/11 04:14 PM Re: Income: Application vs. Verification Docs AuditorK
Kathleen O. Blanchard Offline

10K Club
Kathleen O. Blanchard
Joined: Dec 2000
Posts: 21,277
This is where you have to determine if the bank has a standard figure they report on the LAR. It is supposed to be the gross income (but that doesn't always work, as you will find in a review of threads).
If the amount used in the DTI is an adjusted/net figure, what gross figure was used to arrive at that number? What is being used on other loans? You want consistency.

I would recommend in my report that the files must contain a clear statement of the gross income used for approval. This is important so that loan approvals can be compared for fair lending purposes. You want to make sure that all borrowers are being treated the same and not some having income adjusted and others not. HMDA is the gateway to fair lending for residential loans. Calculations are important.
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

Return to Top