Conventional
1) Michael Brown is 25% owner of a corporation called ABC Printing Co. which files a return with the IRS using form 1120. He has a car loan on his credit report open for the past 24 months being paid on time. He indicates that said car loan is paid by his corporation and should not be included in his DTI. What documentation and analysis would be required in order to exclude this debt?
2) The credit report indicates a mortgage that was “settled for less than amount owed,” in August 2015. What further information would you need in order to determine what the waiting period would be before borrower can obtain FNMA financing?
3) Tony Johnson receives social security income in the amount of $2,000 per month according to the award letter in the file from SSA. Loan was submitted with income being “grossed-up” by 25%. What documentation would you look for to determine if John’s SSI income could be calculated this way?
4) Mary Jones applied for a mortgage & works as a nurse at ABC Hospital. Her 2020 ytd paystub with pay period ending October 31st indicates YTD base earnings of $29,300 and YTD overtime of $3,800. Using anything less than $4,000 gross income per month would result in an unacceptable DTI. Please see below information obtained from her employer as of 10/31/2020 and indicate what additional conditions would be required if any in regards to her income. (Please show calculations)
5) Using the same information from #4 above, but the borrower is able to provide documentation that they were on unpaid leave from 4/1/2020 – 6/30/2020. How does this impact your decision and calculations? (please explain and show calculations)
6) Per FNMA Guidelines, how are reserves calculated for multiple financed properties in the below situations (complete the highlighted boxes)
a. Borrower has 4 financed properties
| Occupancy | Outstanding UPB | Monthly PITIA | Reserves Calculation | |
| Subject: 2nd Home | $100,000 | $1,000 | __mos or ___% | $_______ |
| Primary | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor | $100,000 | $1,000 | __mos or ____% | $_______ |
| Total Reserves: | $______ | |||
b. Borrower has 6 financed properties, one is pending sale
| Occupancy | Outstanding UPB | Monthly PITIA | Reserves Calculation | |
| Subject: Investor | $100,000 | $1,000 | __mos or ___% | $_______ |
| Principal | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor (pending sale) | $100,000 | $1,000 | __mos or ___% | $_______ |
| Investor | $100,000 | $1,000 | __mos or ___% | $_______ |
| 300000 | Total Reserves | $______ |
7) The borrower is doing a rate/term refinance on their single family, primary residence. They have 2 other financed investment properties and need to use rental income from both to qualify. You see both properties have mortgages on the borrower’s credit report that supports the dates of purchase stated below, with no delinquent payments. Using the two scenarios below, please condition for the applicable documentation:
a. 2 unit Investment property, purchased in May 2020
b. Single family investment property, purchased in 2018
YTD20192018Avg # hours worked /week40
Base29,300.00$ 43,500.00$ 42,700.00$ Hourly Rate22.00$
OT3,800.00$ 10,000.00$ 9,500.00$ Date of last raise1/1/2020
Other50.00$ 75.00$ 250.00$ Amount of last raise$1 / hour
Total33,150.00$ 53,575.00$ 52,450.00$
