According to Anchorage Daily News and other internet news sources, indictments were handed down in federal court Wednseday for mortgage fraud and named Koursosh Partow as the defendant. Mr. Partow is accused of submitting loan applications to lenders wherein the income and assets of the borrower was misprepresented and overstated.
In the past, most indictments against loan officers involved falsified documentation of income or assets, but this is the first indictment in what some industry experts forsee as only the beginning, of "policing" stated income loan programs.
Stated income and/or stated asset loan programs are designed to compensate for the inability of a borrower to provide paperwork or other traditional documentation of their income. Initially, these loans were only available for self-employed borrowers and required other documentation to prove the existence of income, gross receipts, audited profit & loss statements, bank statements, invoices, etc.
In the more competitive world of mortgage financing, stated income and/or asset loan programs were expanded to be permitted for borrowers who have stable, hourly or salary jobs causing some mortgage industry experts to dub them "liar loans".
According to the indictment, Partow "caused loan applications for various borrowers to reflect inflated income and bank accounts, either by inserting an income number above the borrower's real income in the loan application, or by adding the income of the borrower's spouse or other person to the income of the borrower."
Stated income programs are designed to remove the REQUIREMENT for proving income, they were never intended for the purpose of FALSIFYING, or lying about the actual income of the loan applicant.
©2007 Ken Stampe
Ken Stampe is a Mortgage Loan Originator, Mortgage Author and Mortgage Loan Officer Instructor living in Dallas, TX. Ken provided his first client a mortgage loan in 1996 and writes about home buying and mortgages to help clients make smart home mortgage loan decisions. Contact by email at Ken@KenStampe.com
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