Search is your friend: http://calculatedrisk.blogspot.com/2008/05/bk-judge-rules-stated-income-heloc-debt.html
In case you are unaware, the 2005 BK law was supposed to “end” lien stripping. What this story says is that practice has returned even under the new law, at least in the case of 2ndary mtgs/loans. This is, as the article said, one judge making a ruling, which is likely to be cited in other cases and if challenged at appeal, will likely become precedent.
The author does not miss the point of stated loans. You need to read more of what this guy writes to realize he abhors the 2005-2007 tendency of bank to PREFER giving stated loans even to people who get W-2 as a way to loan up to 125% of the value of the house.
Heck, I’m self-employed and have been for 24 years. When I got my last mortgage in 2005 I took in my previous 2 years’ tax returns for a full-doc loan. There’s a good reason these were called liar loans - the people getting them were likely lying to the bank as well as to the IRS. However, even tho they lied, it doesn’t take away the bank’s obligation for due diligence before claiming harm.
Sorry you are having a hard time with reading comprehension. This guy writes succinctly and well. But if you don’t “get it”, read the calculated risk version - it says the same thing.
You are still confused.
This issue is one of bankrucy reform.
The reform has been a failure. The means test is a joke as it only affects less than 25% of filers and then some legitimate preplaing avoids it.
The blogger has no knowledge of the law. They are misreading this in context of past law. There are other “luxury purchase” cases that were equally dumped.
This is just following established case law from even pre 2005 code.
But that is ok, amature do it yourselfers are good for business.