“I was told by a banker that if a person put down they worked for McDonald’s and earned $100,000.00 annually, they were to take their word for it.”
You were misled. When you get a mortgage from either a bank or a mortgage broker, you have to provide real documentation to backup your income. In North Carolina, you have to provide your paystubs, w2 form, and a copy of your most recent filed taxes.
That’s how it worked in the early 90’s, and it’s still how it worked in the 2000’s.I doubt any of this stuff is true that the Democrats are claiming. They’re just trying to mislead the voters into thinking the fault is with the banks, rather than government run mortgage industry (Fanny and Freddie).
You are, like so many conservatives and Republicans, living in a dream world of your own making.
In fact, there is a class of mortgages called “stated income” loans which were exactly as described: Even if the odds of the job producing the stated income were slim to none, the bank took the applicant at their word.
An overview of the types of no-verification loans:
http://moneycentral.msn.com/content/banking/financialprivacy/p33720.asp
Here’s an example of a stated income loan:
http://www.loanshoppers.net/stated.htm
NB the following therein:
“Note: Many of these flexible terms and conditions have changed as of 2008. Although, they still exist in 2010, the equity required for a stated income mortgage refinance is usually 30% or more.”
Such loans existed and they STILL exist - only with higher down payments.
