Most seller finance borrowers are self-employed, and that's where a lot of originators get tripped up. In this episode I walk through how we actually verify self-employed income at Call The Underwriter, why it matters for Dodd-Frank compliance and your own protection, and the system we use to get through it fast.

I cover why W-2 and fixed-income borrowers are easy, why tax returns usually understate self-employed income, and why 12 complete business bank statements are the workhorse document. I also get into the expense ratio approach for turning gross deposits into usable income, the account and commingling problems we run into constantly, and what borrower behavior tells you before you ever see the file. Plus the story of a loan with a mystery dog kennel that supposedly made $30k in a single month.

If you originate or buy seller finance notes, this one will clear up a lot of confusion around documenting income that doesn't come with a pay stub.

Questions? Drop them in the comments or email dan at calltheunderwriter.com.

For more info on underwriting seller finance loans or get started on a deal go to www.calltheunderwriter.com