Illinois Senate Bill 1167 -- No more stated income?

By
Services for Real Estate Pros

Even though Senate Bill 1167 has not yet taken effect, the writing is on the wall.  I just got a copy of an email one major lender sent out to its broker/correspondent partners regarding Illinois loans:

"Due to the SB1167 legislation, XXXXXX will no [sic] fund any stated income loans as of June 1st, 2008. This includes our Agency Express SIVA program, FHA Streamlines with no credit qualifying, AND full doc conforming loans (both DO and LP) where only a verbal VOE is requested. For conforming loans, we can still do them, but the income will be traditionally qualified with a pay stub and two years W2s."  Emphasis added.

This is only one lender's reaction to the new legislation  --  no doubt others may take different positions regarding their approach to SB 1167.  It's definitely interesting to see how cautious one's approach can be.  Comments anyone?

 

 

Comments (2)

Patrick Scott
OConnor Title Guaranty, Inc. - Chicago, IL

When this appeared in its earlier incarnation (HB4050) it was limited to 10 Chicago zip codes and  had different criteria for forced counseling (paid by broker).  From what I remember of that fiasco, most sub-prime lenders refused to lend in those zip codes at all.  They simply pulled out. 

I can't see too many lenders foregoing the entire Cook County market (yes, Illinois' solution to the disaster has been to expand the affected area and tweak the rules) but messages like the one you posted will not be surprising.  I would expect more such messages, with greater frequency, as the date approaches for implementation - unless it is repealed before then.  Thanks for the timely post!

May 21, 2008 03:27 PM
Juan Boldizsar
Belleville, IL

Thanks for your comment, Patrick.  Actually, the "stated income" part of the law is statewide.  The part of the law that relates to Cook County only and requires counseling for either refis or first-time buyers who apply for loans that are interest-only, are neg-am, have pre-pays, etc.  It's definitely controversial.   I'll be updating this entry with any other announcements like the one referred to.

May 21, 2008 04:33 PM