A self-employed borrower provides business bank statements showing irregular deposit patterns. What is the most appropriate next step for asset verification?
Correct Answer
C) Obtain additional documentation such as profit and loss statements and tax returns
For self-employed borrowers with irregular income patterns, additional documentation like P&L statements and tax returns are necessary to properly verify both income and assets. Bank statements alone are insufficient for complete verification.
Why This Is the Correct Answer
For self-employed borrowers with irregular income patterns, additional documentation like P&L statements and tax returns are necessary to properly verify both income and assets. Bank statements alone are insufficient for complete verification.
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A self-employed borrower's tax returns show significant depreciation expenses that reduce their adjusted gross income. For mortgage qualification purposes, the MLO should:
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