A 1099 contractor has been working for the same company for 18 months but only has one year of tax returns filed as self-employed. To use this income for qualification, the MLO must:
Correct Answer
C) Obtain a CPA letter confirming the income and verify stability with the contracting company
When a self-employed borrower has less than two years of tax returns but can demonstrate income stability, a CPA letter analyzing the income along with verification of the ongoing business relationship can be used. The income must still be verified as stable and continuing.
Why This Is the Correct Answer
When a self-employed borrower has less than two years of tax returns but can demonstrate income stability, a CPA letter analyzing the income along with verification of the ongoing business relationship can be used. The income must still be verified as stable and continuing.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
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