Without “stated income” and/or “no income, no asset” (nina) loans…the playing field can be level.
For Harry Howmuchamonth it didn’t matter what the price was…only the payment. With ridiculously low starter rates of 1% APR, Harry Howmuchamonth was perfectly happy to engage his cousins (the millions of other Howmuchamonths out there) in bidding wars for properties that appeared they could only go UP in value.
In recent years, since 90% of stated income loan applicants overstated their income AND 60% of stated income loan applicants overstated their income by 50% or more you should be able to connect the dots here to see what we are talking about. (Somebody help me out with the name of the study that supports these numbers. I believe it was for 2005 applicants…2006 was likely more fraudulent.)
Definition- Overstate your income so that you can buy a house more expensive than the one you actually qualify for=fraud.
Now…these people are going to get completely fried and they deserve to. Did I really need to explain that to anyone?
