Stated income loans were huge contributors to the housing crisis, but they are making a very quiet reappearance in the housing market. Should the industry be concerned?
As originally designed stated loans were rational vehicles for borrowers that have a lot of assets, income, are self-employed, and have a lot of corporate records and tax records. The drama with these loans began just before the housing crisis when borrowers were no longer stating what they earn. but instead, stating what it takes to get the loan, while lenders did not take the time to properly underwrite these loans.