FAQs About Income Analysis

To obtain additional information visit the Income Analysis product page.

Income Analysis is your intelligent solution for automatically calculating and evaluating borrower income. It scans submitted income documents and provides a streamlined workflow that helps you qualify borrowers efficiently while maintaining compliance with GSE, investor, and Ability to Repay (ATR) guidelines.

Income Analysis uses Optical Character Recognition (OCR) to extract data directly from borrower submitted income documents, eliminating manual calculations and entry. You maintain control over workflows, exceptions, and key processes, while the system automatically checks documents against investor guidelines to reduce gaps and ensure compliance. If a borrower’s income falls short, Income Analysis will even identify potential income opportunities that you can take advantage of, with proper documentation, to help qualify your borrower.

Income Analysis turns unique loan details from income documents into a dynamic Task List just for you. It brings together everything that needs attention—like file deficiencies and opportunities to boost qualifying income—into one streamlined view. You can take action directly from the Task List without switching tabs or screens, saving you time and keeping your workflow efficient.

Income Analysis can be tailored to meet specific investor or portfolio needs. You’ll receive an investor compliant PDF that details all qualifying income sources you’ve selected, along with calculations and comments. The tool integrates investor feedback and, where applicable, provides rep and warrant relief helping reduce the risk of loan buybacks.

Cotality® continuously monitors regulatory changes to ensure alignment with current industry standards. When you submit raw income data, it’s transmitted directly to GSE calculation engines, and validation feedback is provided to support compliance and mitigate risk.

Machine learning powers the data extraction process, helping you generate accurate, consistent, and reliable income report, no matter who initiates the analysis order.

Income Analysis uses a consistent, rules-based engine aligned with investor guidelines to reduce regulatory and financial risk. You benefit from transparent calculations, a full audit trail of user actions, and minimized human error through automated data extraction. Where applicable, investor feedback and representation and warranty relief further strengthen compliance and reduce loan repurchase demands.

Income Analysis can handle complex income calculations for self-employed borrowers and complex earners, simplifying the process and ensuring accurate results. This includes calculations for Schedule C (Form 1040), Partnership (Form 1065), S Corporation (Form 1120S) and Corporation (Form 1120) business types.

The transparent and iterative processing feature allows income documents to be submitted as they become available, and the solution automatically updates the income calculation. It also enables the reviewer to find income opportunities to increase borrower qualifying potential transparently.

The collaboration feature allows multiple users to work on the same loan simultaneously, facilitating teamwork and providing a real-time audit trail of all actions taken.

Yes, Loan Officers and Underwriters have custom views in Income Analysis. The LO View tab simplifies income calculations for Loan Officers by omitting complex details. The Income Calculation tab provides Underwriters with full calculation details, built-in calculators and manual override options.

The Income Analysis maintains a comprehensive Change Log that records all user-initiated updates and system-generated modifications. This audit trail supports operational transparency and facilitates compliance reviews by providing detailed records of all changes.

Income Analysis can be conveniently accessed through Encompass^® Desktop, Encompass Web or directly within the AutomatIQ^® Borrower Portal.

You benefit from seamless integration with both Freddie Mac and Fannie Mae in Income Analysis, enabling automated data exchange and ensuring compliance with agency guidelines. This integration supports Rep & Warrant Relief on eligible transactions, based on the type and accuracy of your income calculations.

With the Document Inventory tool in Income Analysis, you’re automatically alerted to missing documentation based on GSE and investor guidelines. The system knows which documents are required for qualification and flags any gaps, helping you stay compliant and avoid delays.

Income Analysis uniquely provides a single underwriting solution for all income types. It is not a digital report that needs to be keyed into another spreadsheet or calculator. Wages, Commission, Bonus, Rental, Retirement, Investment, Asset, and Self Employment (as well as myriad other types) can all be underwritten in one tool that generates a single compliant output PDF with all qualifying calculations.

Income Analysis is an intelligent solution that uses advanced algorithms to analyze income data and provide accurate results. It is not a static report but a dynamic solution that drives lender workflow and efficiencies while adapting to different income scenarios across all income types.

Multiple users can simultaneously work on the same loan at the same time in Income Analysis. The solution provides collaboration features that allow users to share reports and work together in real time.

Income Analysis integrates directly with Encompass, allowing you to access and run income calculations without leaving your LOS. You can analyze borrower income, update values in Encompass, and push results back to the loan file—all within the streamlined workflow. With one click, you can send the income report to the eFolder, eliminating manual uploads.

By using standardized, rules-based income analysis aligned with GSE and investor guidelines, you can calculate and document income accurately from the start—often as early as pre-qualification. This eliminates guesswork, reduces exceptions, and minimizes the need for conditions. With GSE Rep & Warrant verification built in, you streamline the process, cut down on errors, and close loans faster, all while lowering your repurchase risk.

Income Analysis is certified by both Fannie Mae and Freddie Mac Rep & Warrant Programs. It provides all the raw income data in the formats necessary for the GSEs to perform their calculations and provide the Rep & Warrant relief.

Yes. Income Analysis provides you with the flexibility to include or exclude any portion of the income that you wish during your review.

No, you don’t need to start a new loan. If you no longer the need co-borrower’s income or documentation for qualification simply select the borrower(s) to be included or excluded. To exclude a borrower, select their name. Your selection will be highlighted in blue. Next, use the Include slider to indicate whether the selected borrower income should be included.  

• Underwriters will perform this action from Income Calculation tab.

• Loan Officers will perform this action using the LO View tab.  

It is not a requirement to run the automated underwriting system (AUS) before ordering Income Analysis. However, until the AUS identification number is added to Income Analysis, the findings will remain in “Preview Mode”.

Income Analysis will calculate income based on the income documents provided. If there is an outdated paystub for example, Income Analysis will process it and flag it for your attention. Updated documents can be added at any time and they will override outdated versions and update the calculated figures based on the new documentation submitted.

We recommend asking your Encompass Admin about creating a Loan Folder Business rule within Settings. This action would create an Encompass Alert based on Encompass Log events occuring in the milestone log.

Special characters in document names can interfere with the OCR process. To ensure faster and more accurate results, we recommend removing special characters from the naming convention of income documents prior to uploading.

The OCR QC team adds document-specific notes in Data Capture for legibility issues and Tax Return Notes for unsigned tax documents. This feedback is located in the Summary box located on both the Income Calculation and LO View tabs.

You can configure custom reports in Encompass using milestone log data to track when an Income Analysis request was made versus when the report is ready for review. Your Encompass Admin can assist with setup. Currently, no queue time reports are available in the AutomatIQ Portal.

Calculations provided by Income Analysis are based on the most conservative values pulled directly from borrower documents. You can view and validate all calculations in the interface. If needed, you can make documented income adjustments as the underwriter.

Fannie Mae evaluates both quick and current ratios and applies the one that best fits the business type. You can still affirm the business has sufficient liquidity and maintain R&W coverage.

These messages are not duplications. They are separate from DU messages but may be similar to the messages returned by DU messages regarding income. The messages appearing for the Underwriter are FNMA Income Calculator messages provided to inform Underwriters what the calculator output is based on.

Income Analysis is uses default tolerance limitations based on industry best practices. Tolerances can be updated, but be sure to confirm your credit policy before considering changes. Advise your Sales Consultant if further changes are needed.

You can't change the Baseline figure directly. This figure is generated from Income Analysis data extraction. While the LO can input figures, which impact the LO Adjusted totals and the Underwriter can finalize income, Baseline figures only update with new income documents loaded to Income Analysis. If you believe there’s an error, contact Cotality Customer Service for support.

In this scenario, you should access the investor popup by clicking the FNMA Surround. If the order file contains a DU Casefile ID, click Unaccept; otherwise, click Exit Preview. Either action exits the Fannie Mae® Rep & Warrant (R&W) approved calculations and opens the cash flow analysis, where income is recalculated using the appropriate ownership percentage.

It's important to note that the loan file will not receive R&W relief once you exit the investor approved calculations. However, exiting the calculations allows the income to be evaluated and used for qualification when needed.