Mayram Aram was on Hedgecock today

[CMcG]

Not sure if I spelled his name correctly. He’s mortgage broker, in case you’re not in San Diego. I didn’t hear the whole interview because I was in and out of my car doing errands, but he was surprisingly candid about the dismal market. At the end, though, he said he feels that his industry has been unfairly slammed with most of the blame for the mortgage mess. HE blames consumers and investors (Wall Street, I guess).

Before that, a guy called in and said “My wife and I did the right thing — rented and saved up for a down payment and now that we can afford to buy, we can’t because we’re self-employed and need a stated income loan, which are no longer available.” He blamed that on mortgage brokers spoiling this kind of product for everyone with their loose lending practices.

Hedgecock/Aman got at least one call from a person saying stuff along the lines of “Well, he doesn’t want to state his income because he’s cheating the IRS.”

Bleh to the whole thing.

[Navydoc]

I have a silly question. Why does a self-employed person NEED a stated income loan? Don’t they pay taxes like everyone else? Or does this couple simply want to commit fraud?

[barnaby33]

The fraud usually is already committed. How many self-employed really report all their income? So in reality they do make more money than they are qualified for based on tax returns.

Josh

[Navydoc]

I agree, that’s probably so, but if they’re as responsible as they say they are they should be able to document enough income to purchase the home they want IMO.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[farbet]

That’s why you are a navydoc.If you had your practice you would sing a different tune.

[drunkle]

i’m thinking there’s more to it than that. 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…

[patientrenter]

“i’m thinking there’s more to it than that. 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…”

drunkle, the caller apparently said that they “needed” a stated income loan. Surely that means only one thing: That they are cheating, or planning to cheat, on either their taxes or a lender. If they had difficulty convincing a lender to give them $1 million to buy a house because their self-employed income was not steady, then why would “stating” a higher income than they actually made make their repayment of the loan any more secure?

If I were a lender, I’d want to know as much as possible about a borrower in order to make the most accurate assessment of the risk of future nonpayment. Getting less information just means that I have to charge more than I should for the better risks, and less than I should for the worse risks. If these people think they’d benefit from this, then clearly they must be bad risks. Or they are cheating on their taxes.

Patient renter in OC

[temeculaguy]

Over the next few years it is very likely that there will be even more strict standards in lending and they will advertise those standards. A few relatively low key funds that only bought the highest grade loans are up around 50% on the year and getting lots of play on cnbc and the financial media. Everyone is going to want to get in on that gravy train. I can’t blame them, if it was your money that was being lent out you would want ethical people who pay their taxes, pay their loans and honor their obligations. Stated, subprime and Alt-a are all four letter words now. The new phrase in lending will soon be, “prove it.”

[HLS]

There are still stated income/stated asset programs available for borrowers with credit scores above 680.

Some purchase loans still go as high as 95% to 100%, and rates aren’t that crazy.

The “system” depends on lending. The fact is that most people make their loan payments. A certain % of defaults are expected.

Having a down payment and a crappy credit score isn’t going to work at any reasonable rate. You must have a decent score to start with, and then options open up to you, esp when self employed.

[Raybyrnes]

If you are willing to commit fraud on your taxes doesn’t that set the precedent that mortgage frauad wouldn’t be much different.

This to me seems like a scenario where you are trying to claim 7000 miles of year to an insurance company to get a lower premium and simultaneously trying to get a comapny to reimburse you for 25000 miles of driving. Can’t have it both ways.

I know it happens but feel I would prefer to take the high ground on these issues.

[Raybyrnes]

If you are willing to commit fraud on your taxes doesn’t that set the precedent that mortgage frauad wouldn’t be much different.

This to me seems like a scenario where you are trying to claim 7000 miles of year to an insurance company to get a lower premium and simultaneously trying to get a comapny to reimburse you for 25000 miles of driving. Can’t have it both ways.

I know it happens but feel I would prefer to take the high ground on these issues.

[Raybyrnes]

If you are willing to commit fraud on your taxes doesn’t that set the precedent that mortgage frauad wouldn’t be much different.

This to me seems like a scenario where you are trying to claim 7000 miles of year to an insurance company to get a lower premium and simultaneously trying to get a comapny to reimburse you for 25000 miles of driving. Can’t have it both ways.

I know it happens but feel I would prefer to take the high ground on these issues.

[Raybyrnes]

If you are willing to commit fraud on your taxes doesn’t that set the precedent that mortgage frauad wouldn’t be much different.

This to me seems like a scenario where you are trying to claim 7000 miles of year to an insurance company to get a lower premium and simultaneously trying to get a comapny to reimburse you for 25000 miles of driving. Can’t have it both ways.

I know it happens but feel I would prefer to take the high ground on these issues.

[Raybyrnes]

If you are willing to commit fraud on your taxes doesn’t that set the precedent that mortgage frauad wouldn’t be much different.

This to me seems like a scenario where you are trying to claim 7000 miles of year to an insurance company to get a lower premium and simultaneously trying to get a comapny to reimburse you for 25000 miles of driving. Can’t have it both ways.

I know it happens but feel I would prefer to take the high ground on these issues.

[HLS]

There are still stated income/stated asset programs available for borrowers with credit scores above 680.

Some purchase loans still go as high as 95% to 100%, and rates aren’t that crazy.

The “system” depends on lending. The fact is that most people make their loan payments. A certain % of defaults are expected.

Having a down payment and a crappy credit score isn’t going to work at any reasonable rate. You must have a decent score to start with, and then options open up to you, esp when self employed.

[HLS]

There are still stated income/stated asset programs available for borrowers with credit scores above 680.

Some purchase loans still go as high as 95% to 100%, and rates aren’t that crazy.

The “system” depends on lending. The fact is that most people make their loan payments. A certain % of defaults are expected.

Having a down payment and a crappy credit score isn’t going to work at any reasonable rate. You must have a decent score to start with, and then options open up to you, esp when self employed.

[HLS]

There are still stated income/stated asset programs available for borrowers with credit scores above 680.

Some purchase loans still go as high as 95% to 100%, and rates aren’t that crazy.

The “system” depends on lending. The fact is that most people make their loan payments. A certain % of defaults are expected.

Having a down payment and a crappy credit score isn’t going to work at any reasonable rate. You must have a decent score to start with, and then options open up to you, esp when self employed.

[HLS]

There are still stated income/stated asset programs available for borrowers with credit scores above 680.

Some purchase loans still go as high as 95% to 100%, and rates aren’t that crazy.

The “system” depends on lending. The fact is that most people make their loan payments. A certain % of defaults are expected.

Having a down payment and a crappy credit score isn’t going to work at any reasonable rate. You must have a decent score to start with, and then options open up to you, esp when self employed.

[temeculaguy]

Over the next few years it is very likely that there will be even more strict standards in lending and they will advertise those standards. A few relatively low key funds that only bought the highest grade loans are up around 50% on the year and getting lots of play on cnbc and the financial media. Everyone is going to want to get in on that gravy train. I can’t blame them, if it was your money that was being lent out you would want ethical people who pay their taxes, pay their loans and honor their obligations. Stated, subprime and Alt-a are all four letter words now. The new phrase in lending will soon be, “prove it.”

[temeculaguy]

Over the next few years it is very likely that there will be even more strict standards in lending and they will advertise those standards. A few relatively low key funds that only bought the highest grade loans are up around 50% on the year and getting lots of play on cnbc and the financial media. Everyone is going to want to get in on that gravy train. I can’t blame them, if it was your money that was being lent out you would want ethical people who pay their taxes, pay their loans and honor their obligations. Stated, subprime and Alt-a are all four letter words now. The new phrase in lending will soon be, “prove it.”

[temeculaguy]

Over the next few years it is very likely that there will be even more strict standards in lending and they will advertise those standards. A few relatively low key funds that only bought the highest grade loans are up around 50% on the year and getting lots of play on cnbc and the financial media. Everyone is going to want to get in on that gravy train. I can’t blame them, if it was your money that was being lent out you would want ethical people who pay their taxes, pay their loans and honor their obligations. Stated, subprime and Alt-a are all four letter words now. The new phrase in lending will soon be, “prove it.”

[temeculaguy]

Over the next few years it is very likely that there will be even more strict standards in lending and they will advertise those standards. A few relatively low key funds that only bought the highest grade loans are up around 50% on the year and getting lots of play on cnbc and the financial media. Everyone is going to want to get in on that gravy train. I can’t blame them, if it was your money that was being lent out you would want ethical people who pay their taxes, pay their loans and honor their obligations. Stated, subprime and Alt-a are all four letter words now. The new phrase in lending will soon be, “prove it.”

[drunkle]

renter:

here’s something i just googled:
http://www.mtgprofessor.com/A%20-%20Qualifying/is_the_market_tough_on_selfemployed.htm

i don’t disagree that some fudging may be going on, but according to this guy, lenders are already aware of that possibility.

[drunkle]

renter:

here’s something i just googled:
http://www.mtgprofessor.com/A%20-%20Qualifying/is_the_market_tough_on_selfemployed.htm

i don’t disagree that some fudging may be going on, but according to this guy, lenders are already aware of that possibility.

[drunkle]

renter:

here’s something i just googled:
http://www.mtgprofessor.com/A%20-%20Qualifying/is_the_market_tough_on_selfemployed.htm

i don’t disagree that some fudging may be going on, but according to this guy, lenders are already aware of that possibility.

[drunkle]

renter:

here’s something i just googled:
http://www.mtgprofessor.com/A%20-%20Qualifying/is_the_market_tough_on_selfemployed.htm

i don’t disagree that some fudging may be going on, but according to this guy, lenders are already aware of that possibility.

[drunkle]

renter:

here’s something i just googled:
http://www.mtgprofessor.com/A%20-%20Qualifying/is_the_market_tough_on_selfemployed.htm

i don’t disagree that some fudging may be going on, but according to this guy, lenders are already aware of that possibility.

[patientrenter]

“i’m thinking there’s more to it than that. 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…”

drunkle, the caller apparently said that they “needed” a stated income loan. Surely that means only one thing: That they are cheating, or planning to cheat, on either their taxes or a lender. If they had difficulty convincing a lender to give them $1 million to buy a house because their self-employed income was not steady, then why would “stating” a higher income than they actually made make their repayment of the loan any more secure?

If I were a lender, I’d want to know as much as possible about a borrower in order to make the most accurate assessment of the risk of future nonpayment. Getting less information just means that I have to charge more than I should for the better risks, and less than I should for the worse risks. If these people think they’d benefit from this, then clearly they must be bad risks. Or they are cheating on their taxes.

Patient renter in OC

[patientrenter]

“i’m thinking there’s more to it than that. 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…”

drunkle, the caller apparently said that they “needed” a stated income loan. Surely that means only one thing: That they are cheating, or planning to cheat, on either their taxes or a lender. If they had difficulty convincing a lender to give them $1 million to buy a house because their self-employed income was not steady, then why would “stating” a higher income than they actually made make their repayment of the loan any more secure?

If I were a lender, I’d want to know as much as possible about a borrower in order to make the most accurate assessment of the risk of future nonpayment. Getting less information just means that I have to charge more than I should for the better risks, and less than I should for the worse risks. If these people think they’d benefit from this, then clearly they must be bad risks. Or they are cheating on their taxes.

Patient renter in OC

[patientrenter]

“i’m thinking there’s more to it than that. 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…”

drunkle, the caller apparently said that they “needed” a stated income loan. Surely that means only one thing: That they are cheating, or planning to cheat, on either their taxes or a lender. If they had difficulty convincing a lender to give them $1 million to buy a house because their self-employed income was not steady, then why would “stating” a higher income than they actually made make their repayment of the loan any more secure?

If I were a lender, I’d want to know as much as possible about a borrower in order to make the most accurate assessment of the risk of future nonpayment. Getting less information just means that I have to charge more than I should for the better risks, and less than I should for the worse risks. If these people think they’d benefit from this, then clearly they must be bad risks. Or they are cheating on their taxes.

Patient renter in OC

[patientrenter]

“i’m thinking there’s more to it than that. 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…”

drunkle, the caller apparently said that they “needed” a stated income loan. Surely that means only one thing: That they are cheating, or planning to cheat, on either their taxes or a lender. If they had difficulty convincing a lender to give them $1 million to buy a house because their self-employed income was not steady, then why would “stating” a higher income than they actually made make their repayment of the loan any more secure?

If I were a lender, I’d want to know as much as possible about a borrower in order to make the most accurate assessment of the risk of future nonpayment. Getting less information just means that I have to charge more than I should for the better risks, and less than I should for the worse risks. If these people think they’d benefit from this, then clearly they must be bad risks. Or they are cheating on their taxes.

Patient renter in OC

[drunkle]

i’m thinking there’s more to it than that. 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…

[drunkle]

i’m thinking there’s more to it than that. 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…

[drunkle]

i’m thinking there’s more to it than that. 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…

[drunkle]

i’m thinking there’s more to it than that. 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…

[Navydoc]

I agree, that’s probably so, but if they’re as responsible as they say they are they should be able to document enough income to purchase the home they want IMO.

[Navydoc]

I agree, that’s probably so, but if they’re as responsible as they say they are they should be able to document enough income to purchase the home they want IMO.

[Navydoc]

I agree, that’s probably so, but if they’re as responsible as they say they are they should be able to document enough income to purchase the home they want IMO.

[Navydoc]

I agree, that’s probably so, but if they’re as responsible as they say they are they should be able to document enough income to purchase the home they want IMO.

[barnaby33]

The fraud usually is already committed. How many self-employed really report all their income? So in reality they do make more money than they are qualified for based on tax returns.

Josh

[barnaby33]

The fraud usually is already committed. How many self-employed really report all their income? So in reality they do make more money than they are qualified for based on tax returns.

Josh

[barnaby33]

The fraud usually is already committed. How many self-employed really report all their income? So in reality they do make more money than they are qualified for based on tax returns.

Josh

[barnaby33]

The fraud usually is already committed. How many self-employed really report all their income? So in reality they do make more money than they are qualified for based on tax returns.

Josh

[ucodegen]

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.

[drunkle]

uco:

the link i posted suggested two things. that loans to the self employed are more laborious for the loan borker and that documentation does include tax documents taken directly from the irs. so personal accounting may be out as the banks may not bother looking at your books.

other thoughts… maybe he *needs* the stated income loan in order to get the deal done in time? waiting for the irs to send the loan officer paperwork is too slow? whatever the case, he’ll probably be better off being denied at this point, that the loan guy is doing him a favor?

[(former)FormerSanDiegan]

There are sometimes other reasonably valid reasons to do stated income other than self-employment.

True story … (The names have been changed to protect the innocent)

Joe Blo transferred with his company to a different city and Mrs. Blo switched jobs in the process. She essentially had one lined up, but obviously could not show income with check stubs because she hadn’t started yet. Her income from the old job would not pass muster for underwriters for a full-doc loan because they were buying a home several hundred miles from her current job. The Blo family did a stated income loan that actually reflected their actual income on what is commonly referred to as a liar’s loan. Sometimes I think they are the only suckers who did this.

[patientrenter]

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.

Patient renter in OC

[(former)FormerSanDiegan]

Why couldn’t they have gone to the lender and laid it all out, with full documentation?

The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.

Why would the full-doc lender not reach the same positive conclusion the borrowers did?

One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.

And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.

Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.

By the way, I am Joe Blo.

[(former)FormerSanDiegan]

Why couldn’t they have gone to the lender and laid it all out, with full documentation?

The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.

Why would the full-doc lender not reach the same positive conclusion the borrowers did?

One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.

And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.

Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.

By the way, I am Joe Blo.

[(former)FormerSanDiegan]

Why couldn’t they have gone to the lender and laid it all out, with full documentation?

The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.

Why would the full-doc lender not reach the same positive conclusion the borrowers did?

One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.

And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.

Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.

By the way, I am Joe Blo.

[(former)FormerSanDiegan]

Why couldn’t they have gone to the lender and laid it all out, with full documentation?

The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.

Why would the full-doc lender not reach the same positive conclusion the borrowers did?

One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.

And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.

Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.

By the way, I am Joe Blo.

[(former)FormerSanDiegan]

Why couldn’t they have gone to the lender and laid it all out, with full documentation?

The underwriter sees employment income at a job 200 miles from new house that the buyers is calling their personal residence. Underwriter thinks buyer is trying to buy investment property and get owner-occupied rate.

Why would the full-doc lender not reach the same positive conclusion the borrowers did?

One the buyer says they are leaving their current job, lender assumes income goes to zero. How does one document income from a new job using two pay stubs. It’s a Square peg, round hole problem.

And why isn’t it the lender’s prerogative to make that judgment, whether positive or negative? You are right. It’s their money (sometimes). They make the rules. In this case they made the judgement of having stated income (but not completely no-doc because assets were documented) in exchange for a slightly higher interest rate.

Just trying to point out that stated income, low doc loans are useful for a lot of situations outside of flippers, liars and tax cheats.

By the way, I am Joe Blo.

[patientrenter]

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.

Patient renter in OC

[patientrenter]

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.

Patient renter in OC

[patientrenter]

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.

Patient renter in OC

[patientrenter]

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.

Patient renter in OC

[(former)FormerSanDiegan]

There are sometimes other reasonably valid reasons to do stated income other than self-employment.

True story … (The names have been changed to protect the innocent)

Joe Blo transferred with his company to a different city and Mrs. Blo switched jobs in the process. She essentially had one lined up, but obviously could not show income with check stubs because she hadn’t started yet. Her income from the old job would not pass muster for underwriters for a full-doc loan because they were buying a home several hundred miles from her current job. The Blo family did a stated income loan that actually reflected their actual income on what is commonly referred to as a liar’s loan. Sometimes I think they are the only suckers who did this.

[(former)FormerSanDiegan]

There are sometimes other reasonably valid reasons to do stated income other than self-employment.

True story … (The names have been changed to protect the innocent)

Joe Blo transferred with his company to a different city and Mrs. Blo switched jobs in the process. She essentially had one lined up, but obviously could not show income with check stubs because she hadn’t started yet. Her income from the old job would not pass muster for underwriters for a full-doc loan because they were buying a home several hundred miles from her current job. The Blo family did a stated income loan that actually reflected their actual income on what is commonly referred to as a liar’s loan. Sometimes I think they are the only suckers who did this.

[(former)FormerSanDiegan]

There are sometimes other reasonably valid reasons to do stated income other than self-employment.

True story … (The names have been changed to protect the innocent)

Joe Blo transferred with his company to a different city and Mrs. Blo switched jobs in the process. She essentially had one lined up, but obviously could not show income with check stubs because she hadn’t started yet. Her income from the old job would not pass muster for underwriters for a full-doc loan because they were buying a home several hundred miles from her current job. The Blo family did a stated income loan that actually reflected their actual income on what is commonly referred to as a liar’s loan. Sometimes I think they are the only suckers who did this.

[(former)FormerSanDiegan]

There are sometimes other reasonably valid reasons to do stated income other than self-employment.

True story … (The names have been changed to protect the innocent)

Joe Blo transferred with his company to a different city and Mrs. Blo switched jobs in the process. She essentially had one lined up, but obviously could not show income with check stubs because she hadn’t started yet. Her income from the old job would not pass muster for underwriters for a full-doc loan because they were buying a home several hundred miles from her current job. The Blo family did a stated income loan that actually reflected their actual income on what is commonly referred to as a liar’s loan. Sometimes I think they are the only suckers who did this.

[drunkle]

uco:

the link i posted suggested two things. that loans to the self employed are more laborious for the loan borker and that documentation does include tax documents taken directly from the irs. so personal accounting may be out as the banks may not bother looking at your books.

other thoughts… maybe he *needs* the stated income loan in order to get the deal done in time? waiting for the irs to send the loan officer paperwork is too slow? whatever the case, he’ll probably be better off being denied at this point, that the loan guy is doing him a favor?

[drunkle]

uco:

the link i posted suggested two things. that loans to the self employed are more laborious for the loan borker and that documentation does include tax documents taken directly from the irs. so personal accounting may be out as the banks may not bother looking at your books.

other thoughts… maybe he *needs* the stated income loan in order to get the deal done in time? waiting for the irs to send the loan officer paperwork is too slow? whatever the case, he’ll probably be better off being denied at this point, that the loan guy is doing him a favor?

[drunkle]

uco:

the link i posted suggested two things. that loans to the self employed are more laborious for the loan borker and that documentation does include tax documents taken directly from the irs. so personal accounting may be out as the banks may not bother looking at your books.

other thoughts… maybe he *needs* the stated income loan in order to get the deal done in time? waiting for the irs to send the loan officer paperwork is too slow? whatever the case, he’ll probably be better off being denied at this point, that the loan guy is doing him a favor?

[drunkle]

uco:

the link i posted suggested two things. that loans to the self employed are more laborious for the loan borker and that documentation does include tax documents taken directly from the irs. so personal accounting may be out as the banks may not bother looking at your books.

other thoughts… maybe he *needs* the stated income loan in order to get the deal done in time? waiting for the irs to send the loan officer paperwork is too slow? whatever the case, he’ll probably be better off being denied at this point, that the loan guy is doing him a favor?

[CMcG]

ucodegen —

Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.

Rustico–

I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.

[NotCranky]

Rustico–

“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”

If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.

This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.

The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,

A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.

[NotCranky]

Rustico–

“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”

If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.

This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.

The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,

A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.

[NotCranky]

Rustico–

“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”

If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.

This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.

The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,

A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.

[NotCranky]

Rustico–

“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”

If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.

This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.

The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,

A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.

[NotCranky]

Rustico–

“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”

If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.

This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.

The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,

A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.

[CMcG]

ucodegen —

Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.

Rustico–

I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.

[CMcG]

ucodegen —

Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.

Rustico–

I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.

[CMcG]

ucodegen —

Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.

Rustico–

I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.

[CMcG]

ucodegen —

Back in the mid-eighties, my spouse and I were both self-employed and wrote off a lot of our income. I told our CPA at tax time that we wanted to buy our first home but were afraid we wouldn’t qualify. He said, “Here’s how a lot of people do it — they have two sets of tax returns made — one for lenders and one for the IRS. I recommend it.” This shocked me. We ended up not buying till one of us got a regular W-2 job. I think this is why nowadays, as it says in a link that another poster offered earlier in the thread, lenders often require that the IRS provide the tax return, not the borrower.

Rustico–

I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.

[ucodegen]

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.

[ucodegen]

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.

[ucodegen]

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.

[ucodegen]

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.

[Navydoc]

I have a silly question. Why does a self-employed person NEED a stated income loan? Don’t they pay taxes like everyone else? Or does this couple simply want to commit fraud?

[Navydoc]

I have a silly question. Why does a self-employed person NEED a stated income loan? Don’t they pay taxes like everyone else? Or does this couple simply want to commit fraud?

[Navydoc]

I have a silly question. Why does a self-employed person NEED a stated income loan? Don’t they pay taxes like everyone else? Or does this couple simply want to commit fraud?

[Navydoc]

I have a silly question. Why does a self-employed person NEED a stated income loan? Don’t they pay taxes like everyone else? Or does this couple simply want to commit fraud?

[desmond]

On Mayram,

He and Chamberlame both are pathetic. I wish somebody would ask Mayram how many people he made loans to are in trouble?

[(former)FormerSanDiegan]

It’s spelled Mehran Aram…

I wish somebody would ask Mayram how many people he made loans to are in trouble?
He did a loan for me back in about 2000. I know that’s the olden days, but it worked out fine for me.

[pk92108]

One reason the self employed have a harder time with stated income is that they run a MONSTER amount of expenses (justified and unjustified) through their companies, leaving them with little taxable income at the end of the day….I have no sympathy for them….I personally see people I know using their business credit cards to do their shopping, buy X-mas trees, go on vacations, etc. and who knows what else….Good thing I am not a rat..

It all comes back to haunt you at the end….

[meadandale]

@pk92108

We don’t all do that.

You have to be able to make at least a passing case that the item was a business related expense. Obviously some accountants and business owners are shady and will try and push anything through their business to get the tax break. The IRS will say otherwise when it catches up to them. These things are huge red flags and an audit waiting to happen.

[meadandale]

@pk92108

We don’t all do that.

You have to be able to make at least a passing case that the item was a business related expense. Obviously some accountants and business owners are shady and will try and push anything through their business to get the tax break. The IRS will say otherwise when it catches up to them. These things are huge red flags and an audit waiting to happen.

[meadandale]

@pk92108

We don’t all do that.

You have to be able to make at least a passing case that the item was a business related expense. Obviously some accountants and business owners are shady and will try and push anything through their business to get the tax break. The IRS will say otherwise when it catches up to them. These things are huge red flags and an audit waiting to happen.

[meadandale]

@pk92108

We don’t all do that.

You have to be able to make at least a passing case that the item was a business related expense. Obviously some accountants and business owners are shady and will try and push anything through their business to get the tax break. The IRS will say otherwise when it catches up to them. These things are huge red flags and an audit waiting to happen.

[meadandale]

@pk92108

We don’t all do that.

You have to be able to make at least a passing case that the item was a business related expense. Obviously some accountants and business owners are shady and will try and push anything through their business to get the tax break. The IRS will say otherwise when it catches up to them. These things are huge red flags and an audit waiting to happen.

[pk92108]

One reason the self employed have a harder time with stated income is that they run a MONSTER amount of expenses (justified and unjustified) through their companies, leaving them with little taxable income at the end of the day….I have no sympathy for them….I personally see people I know using their business credit cards to do their shopping, buy X-mas trees, go on vacations, etc. and who knows what else….Good thing I am not a rat..

It all comes back to haunt you at the end….

[pk92108]

One reason the self employed have a harder time with stated income is that they run a MONSTER amount of expenses (justified and unjustified) through their companies, leaving them with little taxable income at the end of the day….I have no sympathy for them….I personally see people I know using their business credit cards to do their shopping, buy X-mas trees, go on vacations, etc. and who knows what else….Good thing I am not a rat..

It all comes back to haunt you at the end….

[pk92108]

One reason the self employed have a harder time with stated income is that they run a MONSTER amount of expenses (justified and unjustified) through their companies, leaving them with little taxable income at the end of the day….I have no sympathy for them….I personally see people I know using their business credit cards to do their shopping, buy X-mas trees, go on vacations, etc. and who knows what else….Good thing I am not a rat..

It all comes back to haunt you at the end….

[pk92108]

One reason the self employed have a harder time with stated income is that they run a MONSTER amount of expenses (justified and unjustified) through their companies, leaving them with little taxable income at the end of the day….I have no sympathy for them….I personally see people I know using their business credit cards to do their shopping, buy X-mas trees, go on vacations, etc. and who knows what else….Good thing I am not a rat..

It all comes back to haunt you at the end….

[(former)FormerSanDiegan]

It’s spelled Mehran Aram…

I wish somebody would ask Mayram how many people he made loans to are in trouble?
He did a loan for me back in about 2000. I know that’s the olden days, but it worked out fine for me.

[(former)FormerSanDiegan]

It’s spelled Mehran Aram…

I wish somebody would ask Mayram how many people he made loans to are in trouble?
He did a loan for me back in about 2000. I know that’s the olden days, but it worked out fine for me.

[(former)FormerSanDiegan]

It’s spelled Mehran Aram…

I wish somebody would ask Mayram how many people he made loans to are in trouble?
He did a loan for me back in about 2000. I know that’s the olden days, but it worked out fine for me.

[(former)FormerSanDiegan]

It’s spelled Mehran Aram…

I wish somebody would ask Mayram how many people he made loans to are in trouble?
He did a loan for me back in about 2000. I know that’s the olden days, but it worked out fine for me.

[desmond]

On Mayram,

He and Chamberlame both are pathetic. I wish somebody would ask Mayram how many people he made loans to are in trouble?

[desmond]

On Mayram,

He and Chamberlame both are pathetic. I wish somebody would ask Mayram how many people he made loans to are in trouble?

[desmond]

On Mayram,

He and Chamberlame both are pathetic. I wish somebody would ask Mayram how many people he made loans to are in trouble?

[desmond]

On Mayram,

He and Chamberlame both are pathetic. I wish somebody would ask Mayram how many people he made loans to are in trouble?

[meadandale]

I lost all credibility for that guy when I called him back in 1999. I didn’t have a realtor and he pushed his dad on me. His dad did absolutely zero work. All of the homes we ended up looking at were ones that I found on the internet and when I would ask him pointed questions about whether the asking prices were a ‘good deal’ he had nothing. Wouldn’t run any comps, wouldn’t give any opinion, didn’t do any work except show up and let me into the places.

I laugh everytime I hear him on the radio–what a charlatan.

[nostradamus]

I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).

A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.

As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.

[patientrenter]

Hats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.

Patient renter in OC

[patientrenter]

Hats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.

Patient renter in OC

[patientrenter]

Hats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.

Patient renter in OC

[patientrenter]

Hats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.

Patient renter in OC

[patientrenter]

Hats off to you, nostrad. I admire the self-employed. I just don’t admire anyone who cheats.

Patient renter in OC

[NotCranky]

I used stated incime because I don’t pay myself I am gorwing my RE holdings instead through sweat equity. I don’t take commission when I buy property. Because I would pay inocome and property taxes on it. I am not after money I am after solvency through rents. First step build my own hosue cash w/o pay. Second step use stated income loan to buy properties I see That I can work for free on for 1 year eating 20k of loan proceeds to live on. The things i bring the table in splitting lots,drawing my own plans , operating heavy equipment, and performing more thatn half of the construction and all the management of a house are worth at least 200k a year. I don’t feel bad stating my income at 50%LTV against my assets and nobody else cares.

What lenders do care about now and why the caller couldn’t get a stated income loan is because reserve requirements are now three times stated income and the probably didn’t have it. If I have to pay income tax on my rentals or capital gains on sales as I go I haven’t cheated anybody on taxes.

Before If I am correct state income require a bank acct that showed a little cash flow. I got a 100% LTV state cash out and helor a few years ago so I could live in my hyperinflated house to pay for a splittable lot and start building my new house and sold that at the peak.

Ps: I edited this thing once I hit a key wrong or something and it got lost. I think it makes sense…gotta go.

[patientrenter]

Rusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?

I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.

I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?

Patient renter in OC

[NotCranky]

I’t doesn’t work that way so why should I look for principles. I am collecting personal assets through leverage of things I bought with income and assets which i sold and paid taxes for if applicable. When I need to pay I will pay. If I sell something I build I will pay.If I collect rents I will pay.Meanwhile since the mortgage is against and owner occuppied home, when I get it, it is tax deductible. I will use it when my wifes income and mine, outside of these projests requires it.Since we reproduced like rodents that isn’t likely. My tax guy asks me what I did and I tell him.
If I use that money to buy an RV do I pay taxes on it,hell no. So where is the “principles” problem with me putting it to good use? besides I hate working 9 to %. Many people here know and perhaps believe I quit selling RE in 2004. So I work to make a living until my principles allows me to sell RE, which is coming real soon. I got principle on top of my principle Patient.

Now please come back and say wow that’s cool Rus or tell me what I am doing wrong . Don’t jsut slink off because I feel dumped on when people do that. Finish what you started. I will take a lesson if you can teach me one.

[patientrenter]

Sorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.

Patient renter in OC

[NotCranky]

Thanks I should not be so fiesty either. What I am doing is legit. I am not going to read the fine print to understand the time frame they want me to average my income, but if I do it for a few years it is no problem. I am a “consumer”, too stupid to understand loan documents anyway. This way I have the lifestyle I want.It is a loop hole in a worst case scenario. Why should the ultra rich have all fun while they run us into the ground…if we are not smart? I just want to be sure I have something constructive to do and hopefully a retirement source that some pension fund manager can’t give away that I can pass on to my kids, charity or both.

[Chance the Gardener]

Income tax is on income, not the increase in value of your business. There needs to be a realization event to be taxed on the increase in value of your business, like a sale. Any goodwill you build up in your business (=sale price – book value) will be taxed on the way out (taxable gain = sale price – adjusted basis). If your business has value, you can borrow against that – shouldn’t need to state or prove your income. If your business isn’t good collateral then you should have to put up your tax returns to show a steady income stream. If your taking your income in cash and not claiming it as income, you certainly shouldn’t be allowed to count on that to support a higher ltv. You could use cash toward the down payment though.

I wonder if the IRS has considered using stated income statements against taxpayers in actions to recover taxes on unclaimed income. Its a sworn statement, made by the party being prosecuted. I would think the dead beat would be estopped from claiming his income was less. That would be great – might put some of the blame for this loan mess where it needs to be placed.

[Chance the Gardener]

Income tax is on income, not the increase in value of your business. There needs to be a realization event to be taxed on the increase in value of your business, like a sale. Any goodwill you build up in your business (=sale price – book value) will be taxed on the way out (taxable gain = sale price – adjusted basis). If your business has value, you can borrow against that – shouldn’t need to state or prove your income. If your business isn’t good collateral then you should have to put up your tax returns to show a steady income stream. If your taking your income in cash and not claiming it as income, you certainly shouldn’t be allowed to count on that to support a higher ltv. You could use cash toward the down payment though.

I wonder if the IRS has considered using stated income statements against taxpayers in actions to recover taxes on unclaimed income. Its a sworn statement, made by the party being prosecuted. I would think the dead beat would be estopped from claiming his income was less. That would be great – might put some of the blame for this loan mess where it needs to be placed.

[Chance the Gardener]

Income tax is on income, not the increase in value of your business. There needs to be a realization event to be taxed on the increase in value of your business, like a sale. Any goodwill you build up in your business (=sale price – book value) will be taxed on the way out (taxable gain = sale price – adjusted basis). If your business has value, you can borrow against that – shouldn’t need to state or prove your income. If your business isn’t good collateral then you should have to put up your tax returns to show a steady income stream. If your taking your income in cash and not claiming it as income, you certainly shouldn’t be allowed to count on that to support a higher ltv. You could use cash toward the down payment though.

I wonder if the IRS has considered using stated income statements against taxpayers in actions to recover taxes on unclaimed income. Its a sworn statement, made by the party being prosecuted. I would think the dead beat would be estopped from claiming his income was less. That would be great – might put some of the blame for this loan mess where it needs to be placed.

[Chance the Gardener]

Income tax is on income, not the increase in value of your business. There needs to be a realization event to be taxed on the increase in value of your business, like a sale. Any goodwill you build up in your business (=sale price – book value) will be taxed on the way out (taxable gain = sale price – adjusted basis). If your business has value, you can borrow against that – shouldn’t need to state or prove your income. If your business isn’t good collateral then you should have to put up your tax returns to show a steady income stream. If your taking your income in cash and not claiming it as income, you certainly shouldn’t be allowed to count on that to support a higher ltv. You could use cash toward the down payment though.

I wonder if the IRS has considered using stated income statements against taxpayers in actions to recover taxes on unclaimed income. Its a sworn statement, made by the party being prosecuted. I would think the dead beat would be estopped from claiming his income was less. That would be great – might put some of the blame for this loan mess where it needs to be placed.

[Chance the Gardener]

Income tax is on income, not the increase in value of your business. There needs to be a realization event to be taxed on the increase in value of your business, like a sale. Any goodwill you build up in your business (=sale price – book value) will be taxed on the way out (taxable gain = sale price – adjusted basis). If your business has value, you can borrow against that – shouldn’t need to state or prove your income. If your business isn’t good collateral then you should have to put up your tax returns to show a steady income stream. If your taking your income in cash and not claiming it as income, you certainly shouldn’t be allowed to count on that to support a higher ltv. You could use cash toward the down payment though.

I wonder if the IRS has considered using stated income statements against taxpayers in actions to recover taxes on unclaimed income. Its a sworn statement, made by the party being prosecuted. I would think the dead beat would be estopped from claiming his income was less. That would be great – might put some of the blame for this loan mess where it needs to be placed.

[NotCranky]

Thanks I should not be so fiesty either. What I am doing is legit. I am not going to read the fine print to understand the time frame they want me to average my income, but if I do it for a few years it is no problem. I am a “consumer”, too stupid to understand loan documents anyway. This way I have the lifestyle I want.It is a loop hole in a worst case scenario. Why should the ultra rich have all fun while they run us into the ground…if we are not smart? I just want to be sure I have something constructive to do and hopefully a retirement source that some pension fund manager can’t give away that I can pass on to my kids, charity or both.

[NotCranky]

Thanks I should not be so fiesty either. What I am doing is legit. I am not going to read the fine print to understand the time frame they want me to average my income, but if I do it for a few years it is no problem. I am a “consumer”, too stupid to understand loan documents anyway. This way I have the lifestyle I want.It is a loop hole in a worst case scenario. Why should the ultra rich have all fun while they run us into the ground…if we are not smart? I just want to be sure I have something constructive to do and hopefully a retirement source that some pension fund manager can’t give away that I can pass on to my kids, charity or both.

[NotCranky]

Thanks I should not be so fiesty either. What I am doing is legit. I am not going to read the fine print to understand the time frame they want me to average my income, but if I do it for a few years it is no problem. I am a “consumer”, too stupid to understand loan documents anyway. This way I have the lifestyle I want.It is a loop hole in a worst case scenario. Why should the ultra rich have all fun while they run us into the ground…if we are not smart? I just want to be sure I have something constructive to do and hopefully a retirement source that some pension fund manager can’t give away that I can pass on to my kids, charity or both.

[NotCranky]

Thanks I should not be so fiesty either. What I am doing is legit. I am not going to read the fine print to understand the time frame they want me to average my income, but if I do it for a few years it is no problem. I am a “consumer”, too stupid to understand loan documents anyway. This way I have the lifestyle I want.It is a loop hole in a worst case scenario. Why should the ultra rich have all fun while they run us into the ground…if we are not smart? I just want to be sure I have something constructive to do and hopefully a retirement source that some pension fund manager can’t give away that I can pass on to my kids, charity or both.

[patientrenter]

Sorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.

Patient renter in OC

[patientrenter]

Sorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.

Patient renter in OC

[patientrenter]

Sorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.

Patient renter in OC

[patientrenter]

Sorry, Rus, I wasn’t questioning your personal principles. I just thought I’d read once that, when it came time to define tax law for the self-employed, the tax law principle was established that separation of the annual increase in business value between immediately taxable income and deferrably taxable gain was done using a fair value for the working / managing contribution of the owner to the business. Once you go from principles to practice, it gets complicated, but I thought that was the general guiding principle in this area. I am no tax authority, so I just don’t know if I got that right. I am sure it’s somewhere, but I don’t have the expertise or energy to look it up.

Patient renter in OC

[NotCranky]

I’t doesn’t work that way so why should I look for principles. I am collecting personal assets through leverage of things I bought with income and assets which i sold and paid taxes for if applicable. When I need to pay I will pay. If I sell something I build I will pay.If I collect rents I will pay.Meanwhile since the mortgage is against and owner occuppied home, when I get it, it is tax deductible. I will use it when my wifes income and mine, outside of these projests requires it.Since we reproduced like rodents that isn’t likely. My tax guy asks me what I did and I tell him.
If I use that money to buy an RV do I pay taxes on it,hell no. So where is the “principles” problem with me putting it to good use? besides I hate working 9 to %. Many people here know and perhaps believe I quit selling RE in 2004. So I work to make a living until my principles allows me to sell RE, which is coming real soon. I got principle on top of my principle Patient.

Now please come back and say wow that’s cool Rus or tell me what I am doing wrong . Don’t jsut slink off because I feel dumped on when people do that. Finish what you started. I will take a lesson if you can teach me one.

[NotCranky]

I’t doesn’t work that way so why should I look for principles. I am collecting personal assets through leverage of things I bought with income and assets which i sold and paid taxes for if applicable. When I need to pay I will pay. If I sell something I build I will pay.If I collect rents I will pay.Meanwhile since the mortgage is against and owner occuppied home, when I get it, it is tax deductible. I will use it when my wifes income and mine, outside of these projests requires it.Since we reproduced like rodents that isn’t likely. My tax guy asks me what I did and I tell him.
If I use that money to buy an RV do I pay taxes on it,hell no. So where is the “principles” problem with me putting it to good use? besides I hate working 9 to %. Many people here know and perhaps believe I quit selling RE in 2004. So I work to make a living until my principles allows me to sell RE, which is coming real soon. I got principle on top of my principle Patient.

Now please come back and say wow that’s cool Rus or tell me what I am doing wrong . Don’t jsut slink off because I feel dumped on when people do that. Finish what you started. I will take a lesson if you can teach me one.

[NotCranky]

I’t doesn’t work that way so why should I look for principles. I am collecting personal assets through leverage of things I bought with income and assets which i sold and paid taxes for if applicable. When I need to pay I will pay. If I sell something I build I will pay.If I collect rents I will pay.Meanwhile since the mortgage is against and owner occuppied home, when I get it, it is tax deductible. I will use it when my wifes income and mine, outside of these projests requires it.Since we reproduced like rodents that isn’t likely. My tax guy asks me what I did and I tell him.
If I use that money to buy an RV do I pay taxes on it,hell no. So where is the “principles” problem with me putting it to good use? besides I hate working 9 to %. Many people here know and perhaps believe I quit selling RE in 2004. So I work to make a living until my principles allows me to sell RE, which is coming real soon. I got principle on top of my principle Patient.

Now please come back and say wow that’s cool Rus or tell me what I am doing wrong . Don’t jsut slink off because I feel dumped on when people do that. Finish what you started. I will take a lesson if you can teach me one.

[NotCranky]

I’t doesn’t work that way so why should I look for principles. I am collecting personal assets through leverage of things I bought with income and assets which i sold and paid taxes for if applicable. When I need to pay I will pay. If I sell something I build I will pay.If I collect rents I will pay.Meanwhile since the mortgage is against and owner occuppied home, when I get it, it is tax deductible. I will use it when my wifes income and mine, outside of these projests requires it.Since we reproduced like rodents that isn’t likely. My tax guy asks me what I did and I tell him.
If I use that money to buy an RV do I pay taxes on it,hell no. So where is the “principles” problem with me putting it to good use? besides I hate working 9 to %. Many people here know and perhaps believe I quit selling RE in 2004. So I work to make a living until my principles allows me to sell RE, which is coming real soon. I got principle on top of my principle Patient.

Now please come back and say wow that’s cool Rus or tell me what I am doing wrong . Don’t jsut slink off because I feel dumped on when people do that. Finish what you started. I will take a lesson if you can teach me one.

[patientrenter]

Rusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?

I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.

I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?

Patient renter in OC

[patientrenter]

Rusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?

I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.

I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?

Patient renter in OC

[patientrenter]

Rusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?

I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.

I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?

Patient renter in OC

[patientrenter]

Rusty, if someone runs their own business, working hands-on or by managing it, and they think their efforts are worth $100K a year, and they fully expect to see the value of their business to go up at least $100K because of those efforts, then why shouldn’t they pay income taxes on $100K every year, just like everyone else who works that much?

I thought the tax rules for business owners were that, in deciding how much of the annual increase in the business’s value was taxed immediately as income vs later as capital gain, the income had to be a fair value for the owner’s working contribution to the business. It seems to me that if someone is declaring on a loan application that the fair value is X, then the gross amount of income on their tax return should also be X.

I don’t know much about the underlying principles of tax law as they apply to the self-employed, much less the gray area loopholes in practice. What am I missing on the principles part?

Patient renter in OC

[NotCranky]

I used stated incime because I don’t pay myself I am gorwing my RE holdings instead through sweat equity. I don’t take commission when I buy property. Because I would pay inocome and property taxes on it. I am not after money I am after solvency through rents. First step build my own hosue cash w/o pay. Second step use stated income loan to buy properties I see That I can work for free on for 1 year eating 20k of loan proceeds to live on. The things i bring the table in splitting lots,drawing my own plans , operating heavy equipment, and performing more thatn half of the construction and all the management of a house are worth at least 200k a year. I don’t feel bad stating my income at 50%LTV against my assets and nobody else cares.

What lenders do care about now and why the caller couldn’t get a stated income loan is because reserve requirements are now three times stated income and the probably didn’t have it. If I have to pay income tax on my rentals or capital gains on sales as I go I haven’t cheated anybody on taxes.

Before If I am correct state income require a bank acct that showed a little cash flow. I got a 100% LTV state cash out and helor a few years ago so I could live in my hyperinflated house to pay for a splittable lot and start building my new house and sold that at the peak.

Ps: I edited this thing once I hit a key wrong or something and it got lost. I think it makes sense…gotta go.

[NotCranky]

I used stated incime because I don’t pay myself I am gorwing my RE holdings instead through sweat equity. I don’t take commission when I buy property. Because I would pay inocome and property taxes on it. I am not after money I am after solvency through rents. First step build my own hosue cash w/o pay. Second step use stated income loan to buy properties I see That I can work for free on for 1 year eating 20k of loan proceeds to live on. The things i bring the table in splitting lots,drawing my own plans , operating heavy equipment, and performing more thatn half of the construction and all the management of a house are worth at least 200k a year. I don’t feel bad stating my income at 50%LTV against my assets and nobody else cares.

What lenders do care about now and why the caller couldn’t get a stated income loan is because reserve requirements are now three times stated income and the probably didn’t have it. If I have to pay income tax on my rentals or capital gains on sales as I go I haven’t cheated anybody on taxes.

Before If I am correct state income require a bank acct that showed a little cash flow. I got a 100% LTV state cash out and helor a few years ago so I could live in my hyperinflated house to pay for a splittable lot and start building my new house and sold that at the peak.

Ps: I edited this thing once I hit a key wrong or something and it got lost. I think it makes sense…gotta go.

[NotCranky]

I used stated incime because I don’t pay myself I am gorwing my RE holdings instead through sweat equity. I don’t take commission when I buy property. Because I would pay inocome and property taxes on it. I am not after money I am after solvency through rents. First step build my own hosue cash w/o pay. Second step use stated income loan to buy properties I see That I can work for free on for 1 year eating 20k of loan proceeds to live on. The things i bring the table in splitting lots,drawing my own plans , operating heavy equipment, and performing more thatn half of the construction and all the management of a house are worth at least 200k a year. I don’t feel bad stating my income at 50%LTV against my assets and nobody else cares.

What lenders do care about now and why the caller couldn’t get a stated income loan is because reserve requirements are now three times stated income and the probably didn’t have it. If I have to pay income tax on my rentals or capital gains on sales as I go I haven’t cheated anybody on taxes.

Before If I am correct state income require a bank acct that showed a little cash flow. I got a 100% LTV state cash out and helor a few years ago so I could live in my hyperinflated house to pay for a splittable lot and start building my new house and sold that at the peak.

Ps: I edited this thing once I hit a key wrong or something and it got lost. I think it makes sense…gotta go.

[NotCranky]

I used stated incime because I don’t pay myself I am gorwing my RE holdings instead through sweat equity. I don’t take commission when I buy property. Because I would pay inocome and property taxes on it. I am not after money I am after solvency through rents. First step build my own hosue cash w/o pay. Second step use stated income loan to buy properties I see That I can work for free on for 1 year eating 20k of loan proceeds to live on. The things i bring the table in splitting lots,drawing my own plans , operating heavy equipment, and performing more thatn half of the construction and all the management of a house are worth at least 200k a year. I don’t feel bad stating my income at 50%LTV against my assets and nobody else cares.

What lenders do care about now and why the caller couldn’t get a stated income loan is because reserve requirements are now three times stated income and the probably didn’t have it. If I have to pay income tax on my rentals or capital gains on sales as I go I haven’t cheated anybody on taxes.

Before If I am correct state income require a bank acct that showed a little cash flow. I got a 100% LTV state cash out and helor a few years ago so I could live in my hyperinflated house to pay for a splittable lot and start building my new house and sold that at the peak.

Ps: I edited this thing once I hit a key wrong or something and it got lost. I think it makes sense…gotta go.

[nostradamus]

I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).

A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.

As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.

[nostradamus]

I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).

A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.

As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.

[nostradamus]

I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).

A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.

As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.

[nostradamus]

I’m self-employed and have taken out two loans: one to buy my place (with Downey S&L) and another to refinance it when rates dropped (I got a fixed loan at 4.75% with Wamu).

A stated income loan (AKA liar loan) means they don’t look at documentation like tax returns, W2’s (self-employed don’t get those), and others. Being self-employed doesn’t mean you need to go with a “stated income” loan. You can provide tax returns, 1099 forms, bank records, and of course your FICA score.

As for “having no sympathy for the self-employed” I’m assuming you mean only the ones who write off things like xmas trees and other non-business related items. Although there is great temptation to do this, a self-employed tax filing is an automatic red flag for IRS auditors. I write off as many deductions as possible (home office, business-related travel expenses, etc) but do it all legally and have nothing to hide when the auditors come a’ knockin’. I leave the white-collar crime to our elected officials.

[meadandale]

I lost all credibility for that guy when I called him back in 1999. I didn’t have a realtor and he pushed his dad on me. His dad did absolutely zero work. All of the homes we ended up looking at were ones that I found on the internet and when I would ask him pointed questions about whether the asking prices were a ‘good deal’ he had nothing. Wouldn’t run any comps, wouldn’t give any opinion, didn’t do any work except show up and let me into the places.

I laugh everytime I hear him on the radio–what a charlatan.

[meadandale]

I lost all credibility for that guy when I called him back in 1999. I didn’t have a realtor and he pushed his dad on me. His dad did absolutely zero work. All of the homes we ended up looking at were ones that I found on the internet and when I would ask him pointed questions about whether the asking prices were a ‘good deal’ he had nothing. Wouldn’t run any comps, wouldn’t give any opinion, didn’t do any work except show up and let me into the places.

I laugh everytime I hear him on the radio–what a charlatan.

[meadandale]

I lost all credibility for that guy when I called him back in 1999. I didn’t have a realtor and he pushed his dad on me. His dad did absolutely zero work. All of the homes we ended up looking at were ones that I found on the internet and when I would ask him pointed questions about whether the asking prices were a ‘good deal’ he had nothing. Wouldn’t run any comps, wouldn’t give any opinion, didn’t do any work except show up and let me into the places.

I laugh everytime I hear him on the radio–what a charlatan.

[meadandale]

I lost all credibility for that guy when I called him back in 1999. I didn’t have a realtor and he pushed his dad on me. His dad did absolutely zero work. All of the homes we ended up looking at were ones that I found on the internet and when I would ask him pointed questions about whether the asking prices were a ‘good deal’ he had nothing. Wouldn’t run any comps, wouldn’t give any opinion, didn’t do any work except show up and let me into the places.

I laugh everytime I hear him on the radio–what a charlatan.

[Author]

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