Wednesday, May 23, 2012

Stated Income Loans - Are They Back?

People are always asking us if stated income loans are back. For those of you who are new to the real estate business, a stated income loan allows a borrower to simply "state" their income. In other words, the borrower does not have to document their income with pay stubs. Instead, they just make up a number and get approved for a mortgage based on that phony income.

Stated income loans were the hallmark of the sub-prime mortgage days.

So are they back? The answer is NO, and here's why. The federal government now runs Fannie Mae, Freddie Mac, FHA, and VA - and that's where just about all mortgages end up. Congress has passed regulations saying that Fannie and Freddie cannot buy stated income loans, and FHA and VA never allowed them. So until there is a private market for mortgages, there won't be any stated income loans available. Anyone who thinks that foreclosures are bad for our country would agree that getting rid of stated income loans is one of the smartest things our government has ever done.

The only exception to this "no stated income" rule is for certain types of refinance loans, called "streamline refinances". With a streamline refi, a borrower does not have to prove their income if they are refinancing into the same type of loan that they already have (FHA, VA, etc.) and they have a record of paying their existing mortgage on time.

Getting a loan approved is easy - if you know what to do. The Mortgage Experts know what to do!!!

Make sure you check out our web site:

By the way, don't forget to refinance your current mortgage. Rates are very, very low right now. Don't miss out! Call us today to get the details for your particular situation.

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