[quote=CA renter]
You don’t need “models” to tell you that people who make $36,000/year can’t afford a $700K house. And you don’t need “models” to tell you that a typical maid and a gardener couple are NOT bringing in $250K/year, no matter how many times they write it down on their “no-doc” loan application. This isn’t rocket science. I do not believe for a second that the financial gurus truly didn’t know what they were doing. If this were true, then we should all be very, very afraid because these are the people running our economy, and they are being paid handsomely (the most overpaid people in our society) for doing so.[/quote]
I suspect a lot of people will be surprised, and many even doubt that it’s true, but a lot of those loan applicants NEVER wrote down their income, and never claimed that they had the income on their loan apps. In 2008ish, I reviewed scores of loan packages for loans that were either delinquent and/or already in late stages of the foreclosure process. Many (and I’m almost inclined to say most) of the applications never had anything written on them besides the borrowers signature. (And I did have every single document in their loan file.) I interviewed many of them, and many of those I interviewed never claimed that they made the income on their applications, except the signature on the final loan app signed at the close. In many cases (particularly in the instances you describe), those income figures were provided by someone other than the borrower.
