Santa Rosa, CA -- (SBWIRE) -- 08/04/2010 -- New rules released this past week have basically put a end to the infamous loans of the past century .The new law brings an end to self certified income loans - dubbed "liar loans which became increasingly popular during the last Real Estate Boom !! The problem is that it will also potentially prevent fast-track loans, which require less documentation from applicants deemed low-risk.
According to the latest indusrty insiders , the proposals would prevent credit-worthy customers ( http://www.ourfundsonline.com ) getting a mortgage as well as creating "mortgage prisoners" - homeowners unable to refinance under the new OBAMA MASSIVE MARKET COLLAPSE.
"The FSA proposal to assess affordability for all on a repayment basis over a maximum of 25 years will restrict the amounts that some younger borrowers, typically first-time buyers can borrow," said Nigel Bedford of Largemortgageloans.com is quoted saying.
Stated income loans were mortgage loans made to borrowers without proving their income sources. They were largely removed from circulation after the 2007 mortgage meltdown. After that, loans made without income and sometimes without assets became extremely rare and coveted.
Several intrepid portfolio lenders getting their money from alternative sources like hedge funds and local pension funds would offer the loans and be completely swamped by eager borrowers. Their $500m portfolios would fill in a matter of months and they would stop funding new loans. For borrowers and brokers it became a hunt for a slot with the next lender before they filled up. The market for stated income loans (also called no-doc, SIVA, Low-doc, etc.) was on its last legs.
Thanks to Obama last friday on 8/1/2010 that dying market was given it's last hurrah. The reform bill signed in by Obama outlaws stated income and no doc loans. The market already did not want these loans and now the government has finished them off for good and gave them a boot on the way out the door !!.
Part 1074 (b) of the bill reads:
"No creditor may make a loan secured by real property [i.e., a mortgage loan] unless the creditor, based on verified and documented information, determines that, at the time the loan is consummated, the consumer has a reasonable ability to repay the loan ... and all applicable taxes, insurance, and assessments."
According to the latest indusrty insiders , the proposals would prevent credit-worthy customers getting a mortgage as well as creating "mortgage prisoners" - homeowners unable to refinance under the new OBAMA MASSIVE MARKET COLLAPSE.
"The FSA proposal to assess affordability for all on a repayment basis over a maximum of 25 years will restrict the amounts that some younger borrowers, typically first-time buyers can borrow," said Nigel Bedford of Largemortgageloans.com is quoted saying.
The bill also outlines the steps mortgage brokers and banks must take to verify a person's ability to repay. As is the typical practice now they must review the borrower's credit history, current income, current financial obligations, and debt-to-income ratio. To verify the borrower's income, the lender must review IRS W2+1040 statements, tax returns, bank records, ( http://www.ourfundsonline.com ) and payroll receipts / pay stubs. This means underwriter. Loan officers at banks or mortgage brokers cannot issue a pre-qualification without seeing all this documentation. This is already effectively in place now so it's not too big a shock but it does etch it in stone so there is no questioing the intent .
http://www.Ourfundsonline.com personally think that the lenders will find way to circumvent this regulation once the market will return. When prices+inventory+employment stabilize then support will be found for loans ( http://www.ourfundsonline.com ) as risky as stated income. I am a believer in the market always finding ways to do what it will naturally despite outside influences. There have been quite a lot of outside influences in the mortgage market lately and the industry itself is in a state of flux. It is reinventing itself and rewriting its rules in the midst of the best interest rate environment in recent history. When the dust settles I think that stated income loans will return but until then, get those W2s and 1040s ready or form a good relationship with a "Hard Money" lender if you plan on getting yourself a loan.
Hurry don't wait around send us those "Stated Income " loans today we are a private money ( http://www.ourfundsonline.com ) lender that funds using our own money unlike the banks and credit unions and can fund your loan no matter what Obama says or wants !! Call Jeffrey Martino Young at 310-984-0496 or through our e-mail Californiatdinvestments@gmail.com or our online website at htp://www.Ourfundsonline.com
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