| Has the dust settled yet from the downfall in the | | | | When stated income home loans became available |
| sub-prime mortgage market? It is of my opinion that | | | | twenty plus years ago, they were designed for the |
| obtaining a stated income or no doc mortgage will | | | | self employed borrower that had difficulty qualifying for |
| become much more difficult over the next few | | | | a full documentation mortgage program. In those days |
| months. Getting a stated income or no doc mortgage | | | | the borrower not only was required to have an |
| has changed greatly in the last few months. Lenders | | | | excellent credit rating, but they were also required to |
| have increased credit score requirements and have | | | | have at least a twenty percent down payment. this |
| made it much more difficult for home buyers to qualify | | | | program was very successful and had very few |
| for these loans. | | | | defaults in payments from borrowers. |
| In 2006 some borrowers could get as much as five | | | | Now here it is the year 2007 and foreclosure is at the |
| hundred thousand dollars from some lenders on a | | | | highest levels ever. My advice to home buyers is that |
| stated income mortgage loan with a credit score of | | | | if your income is hard to document, you have a good |
| 580. It seemed at one point that just about anyone | | | | credit history and you can truly afford the mortgage |
| could qualify for a mortgage. Can you believe a | | | | payment on the home that you wish to purchase, a |
| borrower that cannot document his or her income | | | | stated income or no documentation mortgage is an |
| could get 100% stated income financing on their home | | | | excellent choice. |
| purchase with a credit score just above 580? I often | | | | However, if you wish to use a stated income |
| thought that soon will come a day of reckoning on all | | | | mortgage program because you can't qualify for a full |
| of these loans. It is of my opinion that mortgage | | | | documentation loan due to lack of gross monthly |
| brokers or mortgage lenders that qualified their clients | | | | income requirements, you are headed in the direction |
| with low credit scores for these programs were | | | | of jeopardizing your sound financial future. Living a |
| setting up the clients to continue their poor credit | | | | realistic life is much more comfortable. |
| history. | | | | |