Reviewing and Calculating Income from Miscellaneous Sources · Other income types that may or may...

Reviewing and Calculating Income from Miscellaneous Sources

March 2019

2Reviewing & Calculating Income from Miscellaneous Sources

ObjectiveUnderstand the Different Types of Income and How to Document Them‏

– Commission– Bonus and Overtime– Tip Income– Temporary Leave– Seasonal & Unemployment– Capital Gain– Alimony & Child Support– Social Security

• Tax Exempt– Public Assistance

URLA or Form 1003/65

https://www.fanniemae.com/singlefamily/uniform-residential-loan-application

Uniform Residential Loan Application (URLA) Timeline UpdateJuly 1, 2019 Begin Use‏

– Finalized Demographic InformationAddendum

– URLA Effective Dates– Desktop Underwriter® (DU®)

Specification Timeline

Reviewing & Calculating Income from Miscellaneous Sources 4

Uniform Mortgage Data Program® (UMDP ®)

July 1, 2019 Begin Use‏– Freddie Mac timelines

https://www.fanniemae.com/singlefamily/uniform-residential-loan-application

New URLA (1003)

Income Entry

Freddie Mac

Selling Guide Income Topic 5300 Revised

Income Continuance RequirementsIncome continuance charts were added to Topic 5301.1‏– Income and earnings types typically without documentable

continuance– Income types with documentable continuance– Other income types that may or may not have documentable

continuance

Freddie Mac’s Single-Family Seller/Servicer Guide Series 5000: Origination and Underwriting

Topic 5300: Stable Monthly Income and Asset Qualification Sources

Chapter 5301: General Requirements for All Stable Monthly Income and Asset Qualification Sources

Employed Income TypesPrimary‏

– Borrower’s primary source of employed incomeSecondary‏

– Second job, part-time job or multiple jobsAdditional‏

– Commissions– Bonus– Overtime– Tips– Auto allowance– Mortgage differential– Military entitlements– Military Reserves & National Guard– Unemployment with seasonal employment

Primary

SecondaryAdditional

Freddie Mac’s Single-Family Seller/Servicer Guide Topic 5300

Loan Product Advisor Documentation Matrix and Rental Matrix

http://www.freddiemac.com/learn/uw/index.html

Fannie Mae

https://www.fanniemae.com/content/guide/selling/b/index.html

Fannie Mae Commission Income

Freddie Mac Commission Income

Fannie Mae Bonus and OT

Fannie Mae Bonus and Overtime

Freddie Mac Bonus and OTSingle-Family Seller/Servicer GuideSeries 5000: Origination and UnderwritingTopic 5300: Stable Monthly Income and Asset Qualification Sources Chapter 5303: Employed Income5303.3: Additional employed income (09/14/17)

Freddie Mac’s Loan Product Advisor® -Bonus and OT

Tip Income - Fannie Mae DU

https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html#Tip.20Income

Tip Income - Freddie MacTip income‏ The Borrower must have a two-year consecutive history of receiving‏income from tips in order to consider the income for qualifying. For tip income that fluctuates, the Seller must evaluate the income trend and use the amount that is most likely to continue for the next three years

Reviewing & Calculating Income from Miscellaneous Sources

Freddie Tip Income

Single-Family Seller/Servicer GuideSeries 5000: Origination and UnderwritingTopic 5300: Stable Monthly Income and Asset Qualification SourcesChapter 5303: Employed Income5303.3: Additional employed income (09/14/17)

Freddie Mac Selling Guide

Temporary Leave - Fannie Mae

https://www.fanniemae.com/content/guide/selling/b3/3.1/09.html

Temporary Leave - Freddie Mac

Single-Family Seller/Servicer Guide

Series 5000: Origination and Underwriting

Chapter 5303: Employed Income

5303.5: Income while on temporary leave (09/14/17)

Temporary Leave - Freddie Mac

Seasonal Employment and UnemploymentSeasonal employment and unemployment compensation‏ The Borrower must have a two-year consecutive history of receiving‏income from seasonal employment and the seasonal employment income must be likely to continue for at least the next three years in order to consider the income for qualifying. Unemployment compensation associated with seasonal employment may be considered qualifying income if the Borrower has a two-year history of receipt and the unemployment compensation is likely to continue for at least the next three years. The Seller must not use seasonal employment income or unemployment compensation to qualify the Borrower unless the income is reported on the Borrower's individual federal income tax returns for the most recent two-year period

Tax Return Review for UnemploymentAppears on the 1040; 2018 Appears on the Schedule 1 to the 1040 2017‏

Unemployment - Fannie Mae

Seasonal Income - Fannie Mae

Freddie Mac - Unemployment

Non-Employment Income Sources

Fannie Mae Capital Gain Income

Freddie Mac Capital Gain Income

Single-Family Seller/Servicer GuideSeries 5000: Origination and UnderwritingTopic 5300: Stable Monthly Income and Asset Qualification SourcesChapter 5303: Employed Income5305.2: Specific Requirements for Other Income Types (10/31/18)

Alimony and Child SupportAlimony, Child Support or Separate Maintenance Payments‏ Income from alimony, child support or separate maintenance payments may‏be considered qualifying income if the documentation shows that the payer was obligated to make payments to the Borrower for the most recent six months and is obligated to make payment to the Borrower for at least the next three years. Evidence that the payments have been received for the most recent six months is required. If the payer has been obligated to make payments for less than six months, if the payments are not for the full amount or are not received on a consistent basis, the income must not be considered for qualifying

Alimony and Child Support - Fannie Mae

Freddie Mac - Alimony and Child Support

Social Security Income - Fannie Mae

Freddie Mac - Social Security Income

Single-Family Seller/Servicer Guide

Chapter 5305: Other Income

5305.2: Specific requirements for other income types (07/06/17)

Tax Exempt Income - Fannie Mae

Freddie Mac - Tax Exempt Income

Single-Family Seller/Servicer Guide Selling

Public Assistance Income - Fannie Mae

Public Assistance - Freddie Mac

Automobile Allowance - Fannie Mae

Automobile Allowance - Freddie Mac

5303.3: Additional employed income (09/14/17)

Automobile Allowance - Freddie Mac

Genworth Underwriting Guidelines

Genworth Rate Express®

LOS Connections

Training Tools and Information

Additional MI Site Information

59Reviewing & Calculating Income from Miscellaneous Sources 59

ActionCenter®: 800 444.5664

Your Local GenworthRegional Underwriter

Your Genworth SalesRepresentative

Your Genworth Resources

Legal Disclaimer Genworth Mortgage Insurance is happy to provide you with these training materials. While we strive for‏accuracy, we also know that any discussion of laws and their application to particular facts is subject to individual interpretation, change, and other uncertainties. Our training is not intended as legal advice, and is not a substitute for advice of counsel. You should always check with your own legal advisors for interpretations of legal and compliance principles applicable to your business.

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Reviewing and Calculating Income from Miscellaneous Sources · Other income types that may or may...

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