Individual Credit and Income from other sources

Posted By: Lissa P.

Individual Credit and Income from other sources - 06/24/04 03:42 PM

We have an applicant who is requesting Individual Credit with income or assets from other sources. I understand the assets from another source (third party pledge of a CD,etc), but under what circumstances would you want to qualify an applicant based on another's income (when they are not going to be obligated on the debt). In this particular case the applicant is wanting to include her boyfriend's income as her additional source...
Posted By: Andy_Z

Re: Individual Credit and Income from other sources - 06/24/04 04:16 PM

If there is no obligation on the boyfriend's part to pay the debt or to support the girlfriend I wouldn't include his income because there is no binding reason for support.
Posted By: Lissa P.

Re: Individual Credit and Income from other sources - 06/24/04 04:21 PM

Thank you, Andy. That's exactly what we thought!!
Posted By: Dan Persfull

Re: Individual Credit and Income from other sources - 06/24/04 04:40 PM

Official Staff Interpretation 202.7(d)(5)(2)

2. Reliance on income of another person individual credit. An applicant who requests individual credit relying on the income of another person (including a spouse in a noncommunity property state) may be required to provide the signature of the other person to make the income available to pay the debt. In community property states, the signature of a spouse may be required if the applicant relies on the spouse's separate income. If the applicant relies on the spouse's future earnings that as a matter of state law cannot be characterized as community property until earned, the creditor may require the spouse's signature, but need not do so even if it is the creditor's practice to require the signature when an applicant relies on the future earnings of a person other than a spouse. (See 202.6(c) on consideration of state property laws.)
Posted By: Lissa P.

Re: Individual Credit and Income from other sources - 06/24/04 05:48 PM

Thank you, I knew that had to be in writing somewhere but was unable to find it in a hurry.