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#2241548 - 08/25/20 02:12 PM Underwriting - Income Stream
mnbanker09 Offline
100 Club
Joined: Jan 2018
Posts: 122
An individual is refinancing their personal property and using funds to purchase a commercial property. The applicant indicated during conversation with the lender that he will be quitting his job in the next year and will become self-employed, using the commercial space for his new business venture. There is a difference of opinion on whether to consider this in the underwriting decision. Reg B considerations? Thoughts? TIA..

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Lending Compliance
#2241567 - 08/25/20 05:59 PM Re: Underwriting - Income Stream mnbanker09
Dan Persfull Offline
10K Club
Dan Persfull
Joined: Aug 2002
Posts: 47,016
Bloomington, IN
(5) Income. A creditor shall not discount or exclude from consideration the income of an applicant or the spouse of an applicant because of a prohibited basis or because the income is derived from part-time employment or is an annuity, pension, or other retirement benefit; a creditor may consider the amount and probable continuance of any income in evaluating an applicant's creditworthiness. When an applicant relies on alimony, child support, or separate maintenance payments in applying for credit, the creditor shall consider such payments as income to the extent that they are likely to be consistently made.

It's a business decision but you have sufficient reason to believe the income stream currently being relied on will not be available within a year.
The opinions expressed are mine and they are not to be taken as legal advice.

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