Q: Gerald, my mortgage broker told me that he offers stated income loans now. How will the return of stated income loans affect real estate? Carl, Bronx, NY A: Stated income loans are often cited as one of the main causes of the financial crisis of 2008. In the early and mid 2000s, banks approved home mortgages without verifying income, pay stubs or tax returns. Since the financial crisis, banks have tightened lending restrictions for mortgages. In fact, current regulations put lenders who fail to verify a borrower’s ability to repay a loan at risk of having those mortgages challenged in court. Stated income loans have made a comeback recently nonetheless. The Dodd-Frank Act of 2010 essentially made stated-income home […]
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