Mortgage Fraud has been around in various forms for years and although it seems fashionable to point fingers at the point of origination and the lender it is important to note the buyer signed on the dotted line and it is the borrower who makes the representation. BUYERS BEWARE!
My first exposure as an originator to "stated income" prompted me to call the underwriter and ask how we do this, what documentation is required and most important who is responsible for this information? The initial response was silence or an interpretation based upon another interpretation interpreted!
After years of getting the crap beat out of me by some of the worst underwriters in the world this seemed too good to be true. Hind site tells us that under certain credit grades it was too good to be true and a disaster.
Stated income loans are available today and it is important to note that the person who states what they earn is the borrower. Not the lender. Borrowers and Realtors must understand the originator cannot establish the income on the borrowers behalf because if the FBI knocks on the borrowers door the first one to get the blame is .....yes you guessed it the originator. That's pretty much going on today.
As you look at the information please note the percentage under the category of "predatory lending" and although this is FNMA data the result represents reality and is opposite as reported or portrayed in the media, or by the idiots in "DC". This is not to say bad behavior in the lending industry (at point of origination) didn't occur but at the same time it is not as much as many would like to believe.
I am providing a great link for you all to look at. It provides interesting information about FRAUD.
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