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What this task is

This task collects documentation showing that a liability listed on the borrower’s credit report is actually being paid by another party, not the borrower. The liability remains in the borrower’s name, but another individual or entity has consistently made the required payments.

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When this task is required

This task is required when:
  • A liability is coded with an exclusion reason of “Paid By Others”, and
  • The loan is being underwritten under guidelines that allow exclusion of such debts from the borrower’s qualifying ratios if strict documentation standards are met.
Common examples include:
  • A co-signed auto loan where the primary driver has made all payments.
  • A joint credit card regularly paid by an ex-spouse or business partner.

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Why this task is required

Lenders can only exclude a debt from the borrower’s debt-to-income (DTI) when they have strong evidence that:
  • The borrower is not responsible for making the ongoing payments in practice, and
  • Another party has a consistent history of timely payments over a required lookback period.
Proof of payment by others helps underwriters:
  • Confirm that excluding the liability will not understate the borrower’s true obligations.
  • Document compliance with agency or investor rules around co-signed or joint debt.
  • Reduce the risk that the borrower will end up responsible for the debt again shortly after closing.
Without this documentation, the lender must generally include the full payment in DTI, even if another person is currently paying it.

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Documents needed to resolve this task

To satisfy this task, provide:
  • Evidence covering the most recent 12 months (or program-required period) of payments made by the other party, such as:
    • Cancelled checks, bank statements, or electronic payment confirmations clearly showing the payer is someone other than the borrower, and
    • Corresponding account statements showing the liability is being credited as paid.
  • Any court orders, divorce decrees, or formal agreements that assign responsibility for the debt to the other party can further support the case, though they typically do not replace the need for payment history.
These documents allow the underwriter to confidently exclude the liability from DTI, when guidelines permit, without understating the borrower’s financial obligations.