Ability to Repay Income Verification

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    We have an applicant who’s children receive death benefits from social security. To consider this income for purposes of ATR is there a certain length of time these benefits must be received?


    Paragraph 43(c)(4)(vi) states, “In verifying a consumer’s income, a creditor may use a written or electronic record from a government agency of the amount of any benefit payments or awards, such as a “proof of income letter” issued by the Social Security Administration (also known as a “budget letter,” “benefits letter,” or “proof of award letter”).”

    Appendix Q Section II-C-3 states, “a. Income received from government assistance programs is acceptable as long as the paying agency provides documentation indicating that the income is expected to continue for at least three years.
    b. If the income from government assistance programs will not be received for at least three years, it may not be used in qualifying.” Please note that Appendix Q was removed as guidance effective July1, 2021. No new guidance was issued. However it still sheds light on the CFPB’s thinking on this topic.

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