The website says that the mortgage broker is in cahoots with this. He has 15 attempts at adjusting the income in the computer, and keeps moving it up until the borrower qualifies. With a higher interest rate, and the fact that it takes only 10-15 minutes to gather your paperwork or a letter from your CPA to certifiy your business income, the obvious reason to go no-doc is to cheat.
Borrowers and lenders justified this, thinking that when the intro period expires, they will refinance at another teaser rate, or turn around and sell at a much higher price. With higher interest rates, dropping prices, and high debt loads, that dream has turned to a nightmare.
The lenders are paid commission and sold the loan to the MBS market. They have no skin in the game. Borrowers were living on false hopes of indefinite appreciation.
I wish we had some lenders on this forum. But check out the other site, housingbubblecasualty.com, and you will learn a lot about loose lending standards.
