A lender receives a mortgage application where the applicant lists 'homemaker' as their occupation but provides no income information. The spouse works and will be a co-borrower. The lender requests income documentation from the homemaker applicant. This request:
Correct Answer
A) Violates Regulation B if the homemaker applicant is not relied upon for qualification
Under Regulation B, a creditor may not require income information from an applicant's spouse unless the spouse will be contractually liable on the account, the applicant is relying on the spouse's income for qualification, or the applicant resides in a community property state. If the homemaker is not being relied upon for qualification, requiring their income documentation may violate the regulation.
Why This Is the Correct Answer
Under Regulation B, a creditor may not require income information from an applicant's spouse unless the spouse will be contractually liable on the account, the applicant is relying on the spouse's income for qualification, or the applicant resides in a community property state. If the homemaker is not being relied upon for qualification, requiring their income documentation may violate the regulation.
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