[mdunker]

we have a customer that has worked a commission based job for 28 years, in July of this year he lost that job and took another commission based Job from July to December. The customer is now taking another commission based job starting January 2, 2017. How would we/can we qualify them based on atr/qm. We are a small servicer/small creditor.

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[rcooper]

There are requirements for commission income in Appendix Q, but since you are a small creditor you are not required to comply with those. However, you may use it as a guide to help fill in some gaps in if you choose. Generally, Appendix Q says the commission income earned for more than 2 years and between more than 1-2 years is ok with proper documentation, but less than one year is generally not acceptable. He would obviously have tax returns but my concern is his break in employment.

The ATR rules do not detail specific requirements like Appendix Q for commission income, so do have more flexibility in what you require. If you have internal standards you will need to follow those.

Another option may be found in comment 43(c)(2)(i)-3, which says income is reasonably expected if there is a letter from a soon to be employer indicating employment and expected salary. If the employer could offer an expected baseline income that would work.

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