My 25 year old daughter qualified and was approved to buy a new home.
They told her everything was ready to go and to come down and sign the papers.
Well when she went to sign the papers they told her that her payments were going to be $3500.00 a month. She was floored. She only makes $1800.00 a month. She told them I can't make that kind of house payment, how could they possibly approve me for this home loan? well that's how. They used stated income.
They had all the papers drawn up ready for her to sign. They also said she would'nt have to make her first house payment for 6 months.
Obviously she walked away. Unbelievable.
It's hard for me to believe she didn't know the payment was going to $3500 per month when she only makes $1800. What person making $1800 a month is looking at properety worth 600-900k making that much? How about looking at property at about 150k. These stories sound like BS.
You want to talk loan trouble, forget the stated deal, take a look at 1% option ARMS if you really want to see a train wreck in the making. Oh yea, you can get them stated too!
Moe.
The sky is falling, the sky is falling, tha sky is falling...... come on now...
It's hard for me to believe she didn't know the payment was going to $3500 per month when she only makes $1800. What person making $1800 a month is looking at properety worth 600-900k making that much? How about looking at property at about 150k. These stories sound like BS.
You want to talk loan trouble, forget the stated deal, take a look at 1% option ARMS if you really want to see a train wreck in the making. Oh yea, you can get them stated too!
Moe.
I disagree with you about the stories being BS. There are some incredibly naive (and mathmatically challenged) people out there.
I totally agree with you on the Option ARMS. Some people DON'T EVEN KNOW that their principle IS INCREASING per month! This almost happened to our best friends until their brother caught it while browsing the docs. When confronted, the broker said, "Oh, I didn't tell you that? Sorry, I must've forgot".
It always has to be someone else's fault.
Due to my business, I will probably have to go "stated income", however I CAN add, and I know what I can AFFORD.
Stated income does have a purpose.
Brian
Stated income loans arent really anything that new. They are available for business loans as well. It isnt hard to make one work, if you do the math. It never comes down to the last minute to find out what the payments will be.
Thats one of the first worksheets done.
Let me get this straight. If I am a big fatass and the Icecream Man drives down my street everyday, it's his fault that I'm a big fatass? Did I not have the choice to NOT BUY ICECREAM? How can anyone attack the lenders when "it's just business". What about all of those same consumers and their "car loans"? I feel we have not yet begun to see all of the "repo's and foreclosures" that will be 'raining down' real soon. I hope all of those "BIG BALLERS" took good care of their stuff, so you and I can buy their nice toys at 25 cents on the dollar. I'm not so smart, but I do study the subject and read the contracts, before signing. "Ownership" means 100% PAID FOR! Good luck to you all!
pay option ARMS are also a great product when they are used correctly...granted our market in Las Vegas is a little out of the norm...
our office does approx 70 loans per month, and rarely do they see an A-paper deal. I think the deal on the ARM is basically that you are gambling that the house will appreciate more than your negative AM yes/no?? I know a lot of people in the real estate and or mortgage business here in LV that use them on their personal properties...
blah..blah..blah.. just give me my 20K commision check!!! I already know im going to hell!!! but im stoping by the lake first!!!
But seriously, I practice real estate law and ethics with my business. Im licensed in 5 states and hold insurity bonds in 3 others, I feel im justified to recieve the commision. Dont paint the industry because of a few bad apples. Many board members have placed borrowers in neg-am and i/o loans going stated, meaning we (broker) stated the income not the borrower like it is suposed to be. We do that as a service not a dis-service to the borrower. Debt ratios can be tough to meet and if your .01% over you dont qualify, that is what makes stated so valuable. I can give a dozen more examples, but I hope its not needed.
I understand the point of the post but the brokers are not all to blame. I dont belive at all borrowers didn't know what their payments were before signing. They are looking at possible forclosures now and are using the industry as a scapegoat.
If you want to talk about a true real estate "correction" watch for the fall out of martgage brokers who cant stay in bussiness.
blah..blah..blah.. see ya in hell!!!
With property values falling "stated income" loans will soon be a thing of the past..... :idea:
So.....get one while you can!
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