In cases where a trust is the primary borrower and a natural person is a co-borrower, would you report the income of the co-borrower?

I would not. The guidance reads "if the applicant or co-applicant is not a natural person" to report "NA".

Some take the approach that if you use the income of the natural person, you should report it. This is based on the following:

"Similarly, if an institution relies on the income of a cosigner to evaluate creditworthiness, the institution includes this income to the extent relied upon." See Dan's reply here: http://www.bankersonline.com/forum/ubbthreads.php?ubb=showflat&Number=1344907

That said, I tend to agree with raitchjay. My opinion is, the guidance he quoted specifically states ether an "applicant or co-applicant is not a natural person." I interprit this to mean that a natural person could be the applicant, but if a non-natural person is their co-applicant, the Bank should still list NA. I would think this would apply to a situation where the non-natural person has natural person as a co-applicant.

In my opinion, a non-natural person trumps a co-applicant, for purposes of reporting income.

Bottom line, I would recommend contacting your primary regulator and getting their take on this. Then, be consistent in what you do.

Ok...going with same scenario (loan to a trust and a natural person as the co borrower)..and the purpose is home improvement, wouldn't you still test for HPML and HOEPA? Side note...the collateral is the pri res of the coborrower. She is not the owner of the property (the trust is).

Not sure what type of trust you're dealing with, but if the loan is subject to Reg. Z, then you'd need to test for HOEPA and HPML. If the loan is exempt from Reg. Z because of the "non-natural person" exemption, then you wouldn't have to worry about HOEPA and HPML.

It is a rev living trust. The trustee is the coborrower. It's not business purpose. I would say it's subject to reg z.

I wasn't trying to imply that it might be business purpose, just that loans made to non-natural persons, whether business or consumer purpose, are exempt from Reg. Z. Having said that, i'm not an expert on trusts and it seems i might recall a discussion awhile back about revocable versus irrevocable trusts and the applicability of Reg. Z. Sorry....don't know how much that helps you.

If the only borrower was the trust, I wouldn't worry so much, but the co borrower is a person and it's a consumer purpose, so I am thinking reg z should apply.