FSD, I don’t know that the case you cite is an argument to preserve stated income loans.
In the case you cite, the borrowers felt pretty strongly that their income would be enough to support the loan, taking all the facts and circumstances into account.
Why couldn’t they have gone to the lender and laid it all out, with full documentation? Why would the full-doc lender not reach the same positive conclusion the borrowers did? And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative?
By going stated income, it just seems that the borrowers were allowed to self-underwrite. Regardless of the outcome of the underwriting on each case, I think I want to live, and be a saver, in a society where the lenders are in competition, but are in full control of the loan underwriting.
