Learn More At: slideshare.blownmortgage.com Or Call Our Lender Hotline: 888-581-5008 Stated Income Loans 2015 - Blown Mortgage The housing crisis is constantly being blamed for the “bad” loans or the “liar” loans as the No Income, No Asset or Stated Income/Asset loans were called. But today they are making a slow comeback. These loans are not going to be as easy to obtain as they were a few years back, but they are being made available by many lenders, mostly the lenders that can no longer afford to turn potential borrowers away. There has been a major restructuring to the programs, making them much more difficult to get approved for, but they are available for small business owners and investors. What Lenders want for Stated Income Loans In order for any borrower to be eligible for a stated income loan, they need to have many compensating factors. It is not going to be as easy as it was in the past to fudge the numbers on your paperwork and expect to have a loan handed over to you. Borrowers will need to do their due diligence in order to qualify for the loan. This means that they must have outstanding credit, typically a score over 700 and plenty of assets in the bank. The assets are meant to be used as a down payment as well as for reserves. Most banks are asking for six to twelve months of mortgage payments to be in the bank at the time of approval. They are also requiring a 30 percent down payment in most cases. A New Name Because of the “bad” name that Stated Income loans received during the housing crisis, most lenders are considering them an “alternate documentation or income loan.” These loans are meant to help those borrowers that own their own company or use housing investments in order to make an income. On paper, these borrowers might not look like they make a lot of money, but in reality, they are able to afford a mortgage. Many people that are against opening up the possibility of a stated income loan again worry about the fact that even 1 year of payments in the bank is not enough to protect a bank against default on a mortgage that is set to last 30 years. The Reason for the Change It might seem strange that lenders are willing to put their neck out for borrowers again, after being burned by so many defaults not that many years ago. The reasoning behind opening up the possibility for a stated income loans once again is to help out the little guys – the ones that have opened up their own business since the economy tanked and so many people have had to become entrepreneurs in order to survive. These people are trying to make a living and are doing whatever it takes to make it affordable. In these instances, they might take many deductions or write off a lot of expenses in order to minimize their income tax liability.

1. STATED INCOME LOANS: ARE THEY
REALLY BACK?
BLOWNMORTGAGE.COM
LENDER HOTLINE: 888-581-5008

2. The housing crisis is constantly being blamed for the
“bad” loans or the “liar” loans as the No Income, No
Asset or Stated Income/Asset loans were called. But
today they are making a slow comeback. These loans
are not going to be as easy to obtain as they were a few
years back, but they are being made available by many
lenders, mostly the lenders that can no longer afford to
turn potential borrowers away. There has been a major
restructuring to the programs, making them much
more difficult to get approved for, but they are available
for small business owners and investors.
LENDER HOTLINE: 888-581-5008

3. WHAT LENDERS WANT FOR STATED
INCOME LOANS
In order for any borrower to be eligible for a stated income loan,
they need to have many compensating factors. It is not going to
be as easy as it was in the past to fudge the numbers on your
paperwork and expect to have a loan handed over to you.
Borrowers will need to do their due diligence in order to qualify
for the loan. This means that they must have outstanding credit,
typically a score over 700 and plenty of assets in the bank. The
assets are meant to be used as a down payment as well as for
reserves. Most banks are asking for six to twelve months of
mortgage payments to be in the bank at the time of approval.
They are also requiring a 30 percent down payment in most
cases.
LENDER HOTLINE: 888-581-5008

4. A NEW NAME
Because of the “bad” name that Stated Income loans received
during the housing crisis, most lenders are considering them
an “alternate documentation or income loan.” These loans are
meant to help those borrowers that own their own company or
use housing investments in order to make an income. On
paper, these borrowers might not look like they make a lot of
money, but in reality, they are able to afford a mortgage. Many
people that are against opening up the possibility of a stated
income loan again worry about the fact that even 1 year of
payments in the bank is not enough to protect a bank against
default on a mortgage that is set to last 30 years.
LENDER HOTLINE: 888-581-5008

5. THE REASON FOR THE CHANGE
It might seem strange that lenders are willing to put their neck out
for borrowers again, after being burned by so many defaults not
that many years ago. The reasoning behind opening up the
possibility for a stated income loans once again is to help out the
little guys – the ones that have opened up their own business since
the economy tanked and so many people have had to become
entrepreneurs in order to survive. These people are trying to make
a living and are doing whatever it takes to make it affordable. In
these instances, they might take many deductions or write off a lot
of expenses in order to minimize their income tax liability. If this is
the case, they are making more money that it shows on paper, yet
they are being denied a mortgage, making it impossible to own a
home.
LENDER HOTLINE: 888-581-5008

6. WHO BUYS THE STATED INCOME LOANS?
A large problem that lenders are facing with the stated
income loans coming back is who to sell them to. There
are not many investors that are willing to take the risk of
a stated income loan after what has already happened. It
is for this reason that most lenders that offer stated
income loans keep them in their own portfolio, although
there are a few private investors that are willing to take
the risk and purchase the loans.
LENDER HOTLINE: 888-581-5008

7. If you are looking for a stated income loan, you will
need to make sure that your compensating factors
speak for themselves. This means that you should
have excellent credit. If your credit is even below 700,
most lenders will not consider you for this type of loan.
In addition, you need to have verifiable assets. This
means assets in a bank or investment that are
seasoned and verifiable. If you have these items and
plenty to put down on your home (if it is a purchase)
you might have to search a little harder, but you will
likely find a lender to give you a stated income loan.
LENDER HOTLINE: 888-581-5008

8. CLICK HERE
TO LEARN MORE:
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LENDER HOTLINE: 888-581-5008
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9. INFORMATION PROVIDED BY:
Justin McHood
Mortgage Commentator
Information Originally Published: 3/26/15
Justin McHood is Americas Mortgage Commentator and has
been providing Mortgage commentary for over 10 years.
LENDER HOTLINE: 888-581-5008

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