Stated income loans used to be all the rage – until the mortgage crisis hit where lenders everywhere tightened their guidelines and eliminated virtually all stated income programs.
But are stated income loans making a comeback?
There is at least one lender doing them – here is an excerpt from one of their promotional fliers handed out to brokers:
Which brings up an interesting question – are stated income loans bad?
I don’t think so — at least in my opinion, there is nothing “bad” about a stated income loan.
But when you consider stated income loan programs, there are a number of things that could be considered “dangerous” or “possibly dangerous” that could happen.
One of the more common things that happened during the housing boom is many people “stated” that they made more money than they actually did.
And when the market turned, they were left with a house payment that they couldn’t afford.
So as stated income loans come back (and they are coming back) – the conversation might start at “stated income loans are bad“, but could quickly get to “stated income loans might be bad if…“
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