If these new systems are widely accepted, there will be
a flood of mortgages in default within a year or two
of the sale. I worked 10 years in "second-chance" financing for automobiles and what the lender sitting in his/her office will not know is this....How many illegals
will be living in that house and what per cent of the rent are they responsible for? When they move out, or are caught and sent back, will the person whose NAME the loan is in be able to make up that protion of the payment?
Who was the "landlord" that provided rent receipts to help the illegal applicant establish a payment history: brother, cousin, uncle? Is that payment history even legitimate? Etc, etc., etc., These are the problems we encontered on auto loans approved thru sources other than those using credit scores....fraud, fraud, and more fraud.
Over 10 years, I worked for Mercury Finance,Reliance Acceptance, First Merchants Acceptance, and Long Beach Acceptance. All are now out of business. Each one had their own "alternative scoring" system.....
But these CRIMINALS can just waltz right in, with unverifiable information and buy a house? What's wrong with this picture.
I hope the banks that give loans to these criminals find themselves totally screwed, they'll deserve it.
"... will the person whose NAME the loan is in be able to make up that protion of the payment?"
You're going out on a limb here, assuming that anything other than an alias was used for the mortgage application. The financial industry is losing its collective mind.
Then I would suggest that you make sure your finances are in order and a bit of cash is on hand because someone with your background would have a better chance than the rest of us at being an overnight billionaire by buying up the defaults and renting back to the ones already living there.
The whole thing sucks but you might be in a position to make lemonade...