Tax returns are vital to the underwriting process, particularly for self-employed borrowers
, which the mortgage industry generally determines to be anyone with a 25% or greater ownership in a business.
Enables Mortgage Originators to Automate Receipt of Tax Returns for Potential Self-Employed Borrowers
Today, SI and NI loans are available to people who earn documentable wage or salary (W-2) income and not just self-employed borrowers
One lender made time for an entire staff of processors, loan officers and underwriters to attend a self-employed borrower
session given by the lender's underwriting manager.
Besides, they only were following the agencies, Freddie Mac and Fannie Mae, and how they underwrite self-employed borrowers
In the past, self-employed borrowers
could turn to self certification of their income - but the MMR consigned that to the history books.
For self-employed borrowers
, Angel Oak underwrites the loan for income based on 24 months of bank statements.
I suspect this isn't the case at the moment and nowhere is that clearer than with certain lenders' requirements that self-employed borrowers
are able to show a range of documentation from HMRC to prove that the figures they have provided are correct.
The bank said that self-employed borrowers
might find repayment tough.
Even short-term amortizations with balloon payments at the end, the kind that have been popular with self-employed borrowers
, will have a hard time getting the QM seal of approval because of that ability-to-repay requirement, McElmurry said.
Since MetLife Home Loans is smaller than Bank of America, Appel said he believes it's better poised to handle New York City's high prices and many self-employed borrowers
The sector also fears that the Financial Services Authority's Mortgage Market Review could have a negative impact on lenders by raising their compliance costs, leading to more expensive mortgages, while it may also prevent a large section of self-employed borrowers
from getting a home loan.