Stated income liability

[anxvariety]

Can someone detail a little on stated income loans that go bad?

Say Countrywide writes a stated income loan that turns out to contain fraudulent information? If someone puts down 100k and only made 50k and it is discovered after the loan is written – what happens?

If the loan is resold, can the purchaser go after Countrywide for not verifying documentation?

Who’s liable? Thanks for any information.

[GoUSC]

Someone will correct me if I am wrong but I believe the contracts usually have a clause that requires the lender to buy the loan back from the investor if fraud on the part of the lender is found.

[GoUSC]

Someone will correct me if I am wrong but I believe the contracts usually have a clause that requires the lender to buy the loan back from the investor if fraud on the part of the lender is found.

[GoUSC]

Someone will correct me if I am wrong but I believe the contracts usually have a clause that requires the lender to buy the loan back from the investor if fraud on the part of the lender is found.

[GoUSC]

Someone will correct me if I am wrong but I believe the contracts usually have a clause that requires the lender to buy the loan back from the investor if fraud on the part of the lender is found.

[GoUSC]

Someone will correct me if I am wrong but I believe the contracts usually have a clause that requires the lender to buy the loan back from the investor if fraud on the part of the lender is found.

[pencilneck]

Wouldn’t this be fraud on the part of the borrower, rather than the original lender?

I don’t know if or how this changes the scenario.

[pencilneck]

Wouldn’t this be fraud on the part of the borrower, rather than the original lender?

I don’t know if or how this changes the scenario.

[pencilneck]

Wouldn’t this be fraud on the part of the borrower, rather than the original lender?

I don’t know if or how this changes the scenario.

[pencilneck]

Wouldn’t this be fraud on the part of the borrower, rather than the original lender?

I don’t know if or how this changes the scenario.

[pencilneck]

Wouldn’t this be fraud on the part of the borrower, rather than the original lender?

I don’t know if or how this changes the scenario.

[ucodegen]

Two things occur.

1) The originator can be forced to buy back the loan package (once it is securitized, it is no longer handled as individual loans at the bank/investment level). This occurs if the originator or securitizing bank has misstated the inherent risk on the package.

2) If the mis-statement of the income is intentional, it is a crime. See the part near where the signature is on a mortgage application. I also point you to 18 USC 1011 (Title 18, Part 1, Chapter 47, section 1011), 18 USC 1014 (Title 18, Part 1, Chapter 47, 1014). The real thing that has to happen is that the injured parties (banks/investors/trustee) has to file the complaint. The only thing is that the way the mortgage packages get sliced up.. it is hard to tell… and many of the banks/investors/trustees are not really pursuing this avenue yet. I would not make the assumption that they won’t eventually.

Other interesting parts may apply.. ie Title 18 Part I Chapter 9 depending upon what happens afterwards or events leading up to (cash back?)

[ucodegen]

Two things occur.

1) The originator can be forced to buy back the loan package (once it is securitized, it is no longer handled as individual loans at the bank/investment level). This occurs if the originator or securitizing bank has misstated the inherent risk on the package.

2) If the mis-statement of the income is intentional, it is a crime. See the part near where the signature is on a mortgage application. I also point you to 18 USC 1011 (Title 18, Part 1, Chapter 47, section 1011), 18 USC 1014 (Title 18, Part 1, Chapter 47, 1014). The real thing that has to happen is that the injured parties (banks/investors/trustee) has to file the complaint. The only thing is that the way the mortgage packages get sliced up.. it is hard to tell… and many of the banks/investors/trustees are not really pursuing this avenue yet. I would not make the assumption that they won’t eventually.

Other interesting parts may apply.. ie Title 18 Part I Chapter 9 depending upon what happens afterwards or events leading up to (cash back?)

[ucodegen]

Two things occur.

1) The originator can be forced to buy back the loan package (once it is securitized, it is no longer handled as individual loans at the bank/investment level). This occurs if the originator or securitizing bank has misstated the inherent risk on the package.

2) If the mis-statement of the income is intentional, it is a crime. See the part near where the signature is on a mortgage application. I also point you to 18 USC 1011 (Title 18, Part 1, Chapter 47, section 1011), 18 USC 1014 (Title 18, Part 1, Chapter 47, 1014). The real thing that has to happen is that the injured parties (banks/investors/trustee) has to file the complaint. The only thing is that the way the mortgage packages get sliced up.. it is hard to tell… and many of the banks/investors/trustees are not really pursuing this avenue yet. I would not make the assumption that they won’t eventually.

Other interesting parts may apply.. ie Title 18 Part I Chapter 9 depending upon what happens afterwards or events leading up to (cash back?)

[ucodegen]

Two things occur.

1) The originator can be forced to buy back the loan package (once it is securitized, it is no longer handled as individual loans at the bank/investment level). This occurs if the originator or securitizing bank has misstated the inherent risk on the package.

2) If the mis-statement of the income is intentional, it is a crime. See the part near where the signature is on a mortgage application. I also point you to 18 USC 1011 (Title 18, Part 1, Chapter 47, section 1011), 18 USC 1014 (Title 18, Part 1, Chapter 47, 1014). The real thing that has to happen is that the injured parties (banks/investors/trustee) has to file the complaint. The only thing is that the way the mortgage packages get sliced up.. it is hard to tell… and many of the banks/investors/trustees are not really pursuing this avenue yet. I would not make the assumption that they won’t eventually.

Other interesting parts may apply.. ie Title 18 Part I Chapter 9 depending upon what happens afterwards or events leading up to (cash back?)

[Author]

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