Verification of Income on Home Equity Line Credit

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Question:

Is verification of income required on a home equity line of credit? If yes, is there a maximum DTI that the lender should not go beyond?

Answer:

There is no regulatory requirement to verify income on a HELOC. Safety and soundness considerations would come into play, however. Any making of consumer based loans that are not made on sound underwriting criteria will come under criticism in this environment. Maximum DTI should be estblished by the bank based on the credit quality they desire.

First published on BankersOnline.com 6/27/11