What's Going on With Stated Income Construction
Loans 
  

      This page of the website was not updated since its launch back in 1999, until the appearance of its first update in the middle of 2007.

In fact the stated income construction loan page has been updated several times since the middle of 07 as the mortgage backed securities market imploded and mortgage lenders went to into a tail spin.

A large number of construction lenders have completely pulled out of the market including but not limited to the market leader, IndyMac Bank. Those who remain have introduce loan to value limitations and in some cases done away with stated income construction loans altogether and accept fully documented loans only.

What’s more is the fact that the reduced loan to value limits are further reduced by introducing the concept of using only 95% of the value of the future value appraisal over and above requiring two appraisal reports and using the lower value of the two. In other words the prospective borrower better be very sure of the future value of the appraisal before fronting the hefty appraisal fees.

To add insult to injury, investors now require huge cash reserves, sometimes equivalent to twelve months of stated income. In other words if the borrower is claiming a $15,000.00 per month stated income then the he should be in a position to show that he will have some $180,000.00 in liquid assets after the close of escrow.

Some lenders have intruded a reserve account calculation based on twelve months equivalent of principal, interest, taxes and insurance payments of both the borrower’s current mortgage and the future loan. The fact that the new construction loan will actually not have any payments during the course of construction does not matter.

May be this is the way things should have been all along. We for long commented that the stated income loan weather for construction or purchase had turned into a lire’s loan and that most every major bank in the nation was far more interested in the number of mortgage loans closed than in the quality of those loans.

Stated income construction loans are still available and are still being made, however the borrower better be very strong to qualify.

More:

Stated Income Loans Are Not Performing and The Blame Game is On…
And now most every major institution is blaming the small brokers for their woes!

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

Stated Income Construction Loans Are Back, With Some Adjustments.  


We Now Offer Construction Loans in Texas 

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