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How does one apply the “reasonable test” when underwriting a Stated/Stated loan?

April 26, 2017loan reasonable test Underwriting

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How does one apply the “reasonable test” when underwriting a Stated/Stated loan?

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The stated amount of monthly income must make sense when compared to the borrower’s stated assets. For example, if a borrower states $20,000 per month in income, but states assets of only $5,000, the amount of the stated assets does not seem to support the fact that the borrower earns $20,000/month. Likewise, the amount of the borrower’s stated income must make sense when compared against his/her position.