What kind of members are required to provide 12 months of bank statements?

Members who receive 1099 and corporate income are required to provide 12 months of bank statements because these income sources are not typically documented in the same way as W-2 income. While W-2 income is reported on a standardized form that employers provide to their employees, 1099 income can come from various sources, such as freelance work, consulting, or contract positions. The documentation of this income through bank statements allows the lender to get a clear, comprehensive view of the member's income over time. By reviewing 12 months of bank statements, lenders can assess the consistency and reliability of the income that is being reported, ensuring that it aligns with the amounts indicated on the 1099 forms. This extra step helps to substantiate the income to reflect the member's financial situation accurately.

Conversely, self-employed members or sole proprietors may have their own requirements for documentation, while members with W-2 income typically provide pay stubs rather than bank statements as proof of income.