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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