I just read a memo that a large national lender increased its employment and income requirements for high-balance conforming loan amounts ($425,000-$729,750); which means that more changes will follow. Changes, I assume, more lenders will also make the same demands and the guidelines will cross over to other loan products. Below are some of the new guidelines:  

• Lender must verify gross monthly income from all acceptable sources can reasonably be expected to continue for at least three years
• For each income source, the source and the amount of the income must be determined as stable
• Verification that there is no indication that income will not continue, including evaluating employment history and stability will be required. Unless there is evidence that income will not continue for three years, it can be reasonably expected to continue

In my book, The New Rules for Mortgages, I spoke of how eventually banks will do future analysis of housing expenses and income. I have blogged many times about underwriters using their own judgment on job/industry stability. That day is here! The problem is not that they are making a judgment call, like in the old days of mortgage approvals, but are now given their own crystal balls!

Dale Robyn  Siegel

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