fraud query

Guest 0.10 Dollars($)

I had applied for a Full Doc loan with my loan officer. The next day he told me that I can't qualify for the loan due to debt ratios. He suggested me to switch over to Stated Loan instead and show higher income. The reason behind is that they need not verify my income with the application. Will it be considered as a fraud if I do so? I am confused. Need advice.

Guest 0.10 Dollars($)

Benj,

Never overstate on your income or how long you have been employed. This is a loan fraud. I don't think your lender is giving you correct advice. You can fall into trouble at any time. Why leave yourself on his hands?

Rhonda

jameshogg · Posted: Thu Apr 13, 2006 11:10 am Post subject:

These are little frauds happening often. Helping a borrower by misrepresenting qualifications so that they can qualify for a mortgage, which they can't afford, is not going to help the borrower in the long run. Don't go by his words. A genuine good lender will never misguide you.

Guest 0.10 Dollars($)

Hi Benj,

People may go to jail for this fraud. It's better if you can switch over to a different lender.

Douglas

Samantha · Posted: Thu Apr 13, 2006 11:56 am Post subject:

Hi Benj,

What every body has suggested is absolutely correct. Often loan officers think that he is doing it well staying within the lending guidelines.

But if your loan officer suggests you to switch over from a Full Doc loan to Stated Income, overstating your income, both of you will be considered fraud for falsifying a loan application in order to get approved.

If you are caught, then you may have to go to jail for this. Even if you are not put into jail, it can put you in trouble.

So, its better to ask your loan officer whether there is any suitable program for you to qualify on the basis of your original debt to income ratio. Else you can check with different lenders/broker for your requirement.

God bless you.

For MortgageFit,
Samantha

Bill · Posted: Thu Apr 13, 2006 2:56 pm Post subject:

Benj,

Stated Income programs are designed to reward borrowers that have excellent credit but have technical issues with proving their income.

Originally only offered to self-employed borrowers, stated income products are now offered to W2 employees as well. As an example, a professional/established barber (like mine) may have a decent base salary but he also relies heavily on his annual tip income for his full lifestyle. The barber may not be able to prove-up on the tip income … so the barber may have to "state" his annual income to qualify for the loan (this example is a real loan that I closed).

In your case, your loan officer may in fact have a "Stated Income" mortgage loan that you qualify for … but he/she cannot now offer this program to you because they have full knowledge of your real income. Stated Income loans are not supposed to be used under these circumstances being as any income amount 'stated' onto a loan application that is anything greater than your real income is technically considered fraud.

At the risk of sounding disingenuous, the loan officer working on your behalf is not necessarily a bad person by suggesting a loan program that you do qualify for … but unfortunately, the series of events as you have stipulated means that the final result would technically be fraudulent - unless of course, you do actually have undocumented supplementary income that you can add to your documentable income for final loan qualification (see 'barber' example above).

Best of Luck!

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