MPF Announcement 2019-39

Updates and Clarifications to the MPF Traditional Selling Guide

Effective Date: Immediately (unless otherwise noted)

The policies for commission income and unreimbursed business expenses have been updated due to recent changes made by the IRS that were effective as of the reporting of 2018 federal income taxes.

Commission Income: Document Requirements

Updated the documentation requirements by replacing the requirement of validating commission income by using  individual tax returns (or tax transcripts), with the requirement to validate using one of the following:

• a completed written Verification of Employment, or
• the borrower’s recent paystubs and IRS W-2 forms covering the most recent two-year period

See MPF Traditional Selling Guide section 5.12.2.

Unreimbursed Business Expenses

The unreimbursed business expenses section from the Guide has been removed, as a result of the tax law changes that prevents Originators from being able to identify unreimbursed business expenses using tax return documents.

Automobile Allowance policy

Clarified that automobile allowance income may be used for qualifying a Borrower if the Borrower  has received such payments for at least two years. The full amount of the allowance must be added to the Borrower’s monthly income, and the full amount of the lease or financing expenditure must be added to the Borrower’s monthly debt obligations.

See MPF Traditional Selling Guide section 5.12.3.