The real thing that probably happening is that the person who complained was probably not reporting all of their income to the IRS(tax fraud). Stated income is not really available, but full doc using tax returns is. In fact, the bank will probably like them better because they will get a better idea of your cash flow position and what amount of debt service cost you could really handle. The full doc works for self-employed quite well.. that is if they are reporting all of their income…
@drunkle i recall self employed people have always had more trouble getting loans than employees. might have to do with the kind of jobs he does, consistency of income on a yearly basis, plain old crappy accounting… and possibly fudging of numbers…
Emphasis is mine. Probably the last two. Inconsistent income can be offset if you have savings. It is hard to offset crappy accounting(makes mortgage people nervous, since some actually have an accounting/finance background). Fudging of number can really kill the deal. Want to kill a deal with a bank? make the bank uncertain as to the honesty in your numbers (though this wasn’t true for the last 4 years or so.). Yes, Mr Loan officer, I really make more income than is shown on that 1040.. I just don’t want to talk about it.
