Posted on: 25th Jun, 2008 04:37 pm
Im wondering if there is giong to be a facelift for the stated loan product. Im not talking about the people who have defaulted or anything like that as much as im talking about the people who have 625 scores, 80 ltv or a bit higher, and were never late on anything in the past 5 years! There is no helping these people right now. Ive come accross my fair share of people who are stated borrowers who were put into adjustable rates a few years ago. the loans are now adjusting and there nothing we can do. doesnt matter if they pay their bills every month, make a million dollars, nothing. i hope someone takes a look at this soon and tries to fix it. at least for the ontime bill payer who just didnt know this was giong to happen... also fannie mae and freddie fell short on expectations for jumbo loans... could it be that 40% of all jumbo paper is stated or was stated? we have a serious problem here helping these people. does anyone have a lender left that will help or does anyone know of any relief in sight for this situation. its killing people...
Welcome john,
I suppose the borrowers who have taken out stated income loans earlier did so because the lending criteria were not as strict as it is nowadays. Lenders have been quite lenient with the credit score and other qualification criteria as a result such borrowers have been able to qualify. And now when rates are resetting they're having problems with the payments as they aren't able to afford it.
It's true that many such borrowers aren't helped because it's simple not possible. I suppose lenders too have restrictions in offering loan to anyone out there. And that's the reason we came across initiatives like the FHA Secure, FHA Secure Expansion, the Project Lifeline etc.
I suppose the borrowers who have taken out stated income loans earlier did so because the lending criteria were not as strict as it is nowadays. Lenders have been quite lenient with the credit score and other qualification criteria as a result such borrowers have been able to qualify. And now when rates are resetting they're having problems with the payments as they aren't able to afford it.
It's true that many such borrowers aren't helped because it's simple not possible. I suppose lenders too have restrictions in offering loan to anyone out there. And that's the reason we came across initiatives like the FHA Secure, FHA Secure Expansion, the Project Lifeline etc.
The best thing someone can do that is in an ARM that adjusts is to contact their lender and see if they can get relief in the form of a fixed rate. Some will many wont. No lender is willing to help someone now that cannot prove they can make the payment by qualifying full doc
Stated loans are dead because they were abused and look at the mess they have created. They can blame the consumer but the banks need to start blaming the loose guidelines.
just my .02$
Stated loans are dead because they were abused and look at the mess they have created. They can blame the consumer but the banks need to start blaming the loose guidelines.
just my .02$
good 2 cents brian.
john, if someone is making a million dollars a year, why would that person need a stated income loan? even if one is cheating the irs and only claiming - oh, say half a million - wouldn't that qualify a borrower for a refinance?
i agree that there's no way out for some of these people, but if they over-inflated their income numbers to begin with, why would a lender want to allow it again?
john, if someone is making a million dollars a year, why would that person need a stated income loan? even if one is cheating the irs and only claiming - oh, say half a million - wouldn't that qualify a borrower for a refinance?
i agree that there's no way out for some of these people, but if they over-inflated their income numbers to begin with, why would a lender want to allow it again?
you guys know what i meant on that post i think. im not saying makes a million literally..... im a 1099 employee, ive been a loan officer/manager for 7-8 years and unfortunately b/c i hide my income for tax purposes i dont see myself getting a loan without 25% down which is the way it SHOULD BE. But im concerned about the guy who hides his income but makes real good money, has never been late on anything, his value dropped to make a refinance 85% ltv (no PMI under 660 score now stated period right?) so i just was asking if a lender that you guys talk with or maybe if youve overheard anyone taking the Apaper from this mess. No lates on anything and Self employed, i find myself saying sorry i cant help. This isnt the 1900's where your on time payments actually matter...
john, if you don't agree that a stated income loan is a risky loan all by itself, and that historically lenders find that the lower the credit score the higher the risk, then it won't matter what we say.
yes i know you didn't mean a million in a literal sense. unfortunately, you have no recollection of the days when there was no such thing as a stated income loan. in the last several years, we've introduced a lot of different products to a lot of different types of people, and there have been severe losses. to counteract those severe losses, lenders get more conservative. it's a pretty standard response to a problem.
instead of lamenting the non-existence of a stated income loan with a 660 score these days, perhaps we ought to lament the early 2000's when these exotic products took over the marketplace and allowed way, way too many people to get loans for which they were obviously not qualified.
it used to be that we would say, "if you can't pay your fair share of taxes, why should we help you get a loan?" for those of us who for many, many, many years were w2 people, it didn't seem quite fair that somebody making a ton of money paid less than us in taxes...especially those who simply fail to claim their total income to begin with (self-employed, cash-type businesses).
yes, the business has changed, and yes, we have to say no to folk to whom we said yes earlier in this decade.
yes i know you didn't mean a million in a literal sense. unfortunately, you have no recollection of the days when there was no such thing as a stated income loan. in the last several years, we've introduced a lot of different products to a lot of different types of people, and there have been severe losses. to counteract those severe losses, lenders get more conservative. it's a pretty standard response to a problem.
instead of lamenting the non-existence of a stated income loan with a 660 score these days, perhaps we ought to lament the early 2000's when these exotic products took over the marketplace and allowed way, way too many people to get loans for which they were obviously not qualified.
it used to be that we would say, "if you can't pay your fair share of taxes, why should we help you get a loan?" for those of us who for many, many, many years were w2 people, it didn't seem quite fair that somebody making a ton of money paid less than us in taxes...especially those who simply fail to claim their total income to begin with (self-employed, cash-type businesses).
yes, the business has changed, and yes, we have to say no to folk to whom we said yes earlier in this decade.
i agree with what you are saying but my piont really was that ever since the stated income loan came out, most self employed borrowers now hide their income. now since they hide it and have been for a few years there is no way to bail them out of their crap loans at all. its not like i dont agree with you its the fact that for a select few the laws shouldnt be as strictly imposed. im only talking about the guy who makes every payment every month and has assetts etc etc etc. not the guy who did no business this year and is in the hole 1x30 or more on his mortgage. that guy shouldnt of been lent money in the first place. you cant deny there are a few out there that are just getting screwed so to say b/c of the stated loan performance. but i guess what it comes down to is that court ruling earlier this year about the stated loan couple who werent forced to repay their mortgage in a court ruling b/c the court said the loan was set up on terms that the lender couldnt truly say they would repay in the first place. if anyone has a copy of that article it should be posted up here
"for a select few the laws shouldn't be as strictly imposed." WOW
so does this apply to every law? murder? theft? rape? let's selectively enforce every law, and if somebody is breaking one law, let's selectively decide that we need to help that person break yet another law. after all, if you're already a lawbreaker, what's another injustice gonna do?
sorry, john, your argument is specious, and i have no sympathy for the poor, downtrodden self employed borrower who cheats the government (we, the people).
i'm unaware of the "stated loan couple" - not forced to repay their mortgage? why should anyone be forced to repay a debt? i thought the voluntary signing of a promissory note also included the voluntary repayment of the underlying debt. i guess i must be living on mars or something.
i am flabbergasted.
so does this apply to every law? murder? theft? rape? let's selectively enforce every law, and if somebody is breaking one law, let's selectively decide that we need to help that person break yet another law. after all, if you're already a lawbreaker, what's another injustice gonna do?
sorry, john, your argument is specious, and i have no sympathy for the poor, downtrodden self employed borrower who cheats the government (we, the people).
i'm unaware of the "stated loan couple" - not forced to repay their mortgage? why should anyone be forced to repay a debt? i thought the voluntary signing of a promissory note also included the voluntary repayment of the underlying debt. i guess i must be living on mars or something.
i am flabbergasted.
George,
I cant believe your post.. laughable to me in the sense that you truly could care less about the ontime for 5 yrs stated loan couple who have assetts to wazoo.. your argument isnt an argument. again anyone who read the post knows that im not talking about the guy that is poor and whatever else you said.
and yes pull up some info on that court ruling. think it was in california. your post reminds me of the judge and what they said to the bank who lent the money.
Again i dont want stated loans back in business like they were, but youre telling me to let the guy who makes money, that makes his payments ontime or before the date they are due, to sit there while his adjustable rate now adjusts and say too bad so sad? cmon guy, im not talking about the guy thats truly broke and misses payments, nor do i want to write anymore paper than is already out there with stated loans, but this is kind of like giving a little kid a cap gun and then laws were passed saying "sorry kid, i know you dont use your cap gun at all (make payments on time...) but the laws have changed and we are still going to arrest you (no help from lenders...) sorry. the reason i used the kid is because thats what some of these people were, they didnt know any better about getting into the stated loan and doing their taxes that way.
do other things like sliced white bread flabbergast you?
pull the article up or i will to "flabbergast" you
I cant believe your post.. laughable to me in the sense that you truly could care less about the ontime for 5 yrs stated loan couple who have assetts to wazoo.. your argument isnt an argument. again anyone who read the post knows that im not talking about the guy that is poor and whatever else you said.
and yes pull up some info on that court ruling. think it was in california. your post reminds me of the judge and what they said to the bank who lent the money.
Again i dont want stated loans back in business like they were, but youre telling me to let the guy who makes money, that makes his payments ontime or before the date they are due, to sit there while his adjustable rate now adjusts and say too bad so sad? cmon guy, im not talking about the guy thats truly broke and misses payments, nor do i want to write anymore paper than is already out there with stated loans, but this is kind of like giving a little kid a cap gun and then laws were passed saying "sorry kid, i know you dont use your cap gun at all (make payments on time...) but the laws have changed and we are still going to arrest you (no help from lenders...) sorry. the reason i used the kid is because thats what some of these people were, they didnt know any better about getting into the stated loan and doing their taxes that way.
do other things like sliced white bread flabbergast you?
pull the article up or i will to "flabbergast" you
George,
This is what i was referring to. I skimmed through it and i was wrong to an extent but i encourage everyone to read this to get a better understanding.
"BK Judge Rules Stated Income HELOC Debt Dischargeable
by Tanta
This is a big deal, and will no doubt strike real fear in the hearts of stated-income lenders everywhere. Our own Uncle Festus sent me this decision, in which Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy.
Continued...................
"http://calculatedrisk.blogspot.com/2008/05/bk-judge-rules-stated-income-heloc-debt.html"
[Post edited as per forum rules]
This is what i was referring to. I skimmed through it and i was wrong to an extent but i encourage everyone to read this to get a better understanding.
"BK Judge Rules Stated Income HELOC Debt Dischargeable
by Tanta
This is a big deal, and will no doubt strike real fear in the hearts of stated-income lenders everywhere. Our own Uncle Festus sent me this decision, in which Judge Leslie Tchaikovsky ruled that a National City HELOC that had been "foreclosed out" would be discharged in the debtors' Chapter 7 bankruptcy.
Continued...................
"http://calculatedrisk.blogspot.com/2008/05/bk-judge-rules-stated-income-heloc-debt.html"
[Post edited as per forum rules]
If i pay my morgage on time for 8 months, Will up my score above 580?
I meant to say will it up my score past 580?
Welcome ann,
It will depend upon the credit score that you have now. Your credit score can go up provided if there are no other late payments or collections in your report. See to it that your payments are reported regularly to the credit bureaus.
It will depend upon the credit score that you have now. Your credit score can go up provided if there are no other late payments or collections in your report. See to it that your payments are reported regularly to the credit bureaus.