Stated Income Loans Are Not Performing and The Blame Game is On…
Stated income
construction loans just like their purchase money and refinance
cousins are going through major changes. Most institutions have
either completely stopped or restricted the guidelines for them.
The first casualty is the salaried employee. Investors who still
underwrite stated income construction loans do so only for the self
employed and have tightened other guidelines such as, loan to value
ratio, credit score and reserve cash requirements.
All major lenders
actively promoted stated income loans and adjusted their
underwriting guidelines to accommodate fraud. Now that the cat is
out of the bag, the CEO’s of the very same institutions are actively
looking for something or someone to blame.
The weakest link
is of course the mortgage broker… People like Sen. Hillary Clinton
are suggesting measures such as additional disclosures as a
solution!
Additional
disclosures? Where did that come from? From the CEO’s of the very
same institutions of course. You see they have access to the likes
of Ms Clinton, and they can not say that they themselves were to
blame, but surly they can blame someone who will never have the
lobbying power to fight back.
We will simply
have to wait until the dust settles and see the stabilized
guidelines as they will for sure emerge and probably enable those
who truly deserve a stated income construction loan to be able to
obtain one.
More:
Upheaval in the Mortgage Industry Effects
Stated Income Construction Loans
The
recent developments in the mortgage industry sparked by the
Sub-Prime mess effect stated income and no income qualifying loans.
The Original Stated Income Construction Loans
Page
This is the original page which was written back in 1999
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