A borrower applies for a $400,000 mortgage. To qualify, she needs to show monthly income of at least $8,000. She submits W-2s showing $7,200/month from her employer and investment account statements showing an average monthly dividend of $900. However, the MLO later discovers that the investment statements were altered — the actual dividends average $200/month. If the fraudulent income were removed, what is the borrower's true qualifying monthly income, and does she meet the threshold?

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Accepted Answer

$7,400/month; she does not meet the $8,000 threshold The borrower's legitimate income is: $7,200 (W-2 wages) + $200 (actual dividends) = $7,400/month. This is below the $8,000 threshold. The altered investment statements falsely showed $900/month in dividends instead of the real $200/month. The fraudulent $700/month inflation made the total appear to be $8,100 — above the threshold. Without the fraud, she does not qualify. This is income/asset fraud. "$8,100/month; she does meet the $8,000 threshold usi..." ignores the legitimate dividend income. "$8,900/month; she meets the threshold because all in..." uses the fraudulent dividend figure. "$7,200/month; she does not meet the $8,000 threshold" uses the fabricated amount.

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