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The Stated Loan Program: a silent killer

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  • Rick | | 15 Jul 2012, 02:16 PM Agree 0
    I really don't know where to begin. I am amazed at the statement you made that 90% of stated mortgages are extremely exaggerated from a "study". Whose study the FBI's? You claim to be in the business for 30 years. If so, then you know Stated Income transformed from EZ doc mortgages back in the late 80s & 90s were fine at 75% LTV maximums and no chance of a 2nd mortgage.

    Another recent study shows there was no difference in the number of defaults from Full Doc mortgages originated to Stated Income mortgages. So, your whole story is untrue in trying to pin it towards one segment of the industry.
    The real culprit was high LTV or CLTV financing that each had in common along with higher DTR allowed by underwriters. Loan officers should not continue to be prosecuted retroactively for originating stated income mortgages which were responsible. Although, if the actual incomes were doubled, then yes there should be a fine or jail time as that is blatant mortgage fraud. I am coming from the angle of responsible mortgage officers I worked with who may have embellished the income by a few hundred bucks but never 1000s. I once got an app from a maid (whom I declined to do a mortgage for) when she said she made $10k /mo and now claims to be dumb? Then there was a law enforcement personnel in the tri-state area wanting to own 4 jumbo mortgage vacation homes in FL. It definitely was ridiculous but let's look at the underwriters and and the mortgage program lawmakers, not just the pawns. They had to see give final approval from the mtg broker and the lender had their Q/A dept. After the app is handed from the L.O., there are many more hoops to jump through. The FBI might as well throw 20% of the country who worked in real estate into federal prison.
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