Ethics · 18% of the SAFE exammedium
Correct answer: Request documentation supporting the additional income, such as two years of tax returns showing the side income
When a discrepancy exists between documented income and stated income, the MLO must require proper documentation before using the higher figure. For self-employment or irregular income, lenders typically require two years of tax returns to verify consistency and sustainability of that income. Simply accepting an unverified explanation would constitute participation in potential income fraud. Denying without investigation is premature. Averaging the figures without documentation is equally unsupportable and could constitute fraud.
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