Minnesota Overreacts to Mortgage Abuse (Oops, I Think the Baby Was in That Bucket)

Lending Clarity (mortgage industry website) ^ | 07/25/2007

[RockinRight]

Not if you write off a lot and have an AGI that is very low. Look at post 27 for an example.

[Jaalle]

When a Lender is underwriting a real estate secured loan, all they are doing is “risk assessment”. If according to the credit report analysis, the Borrower has the necessary credit depth and the underwriter can clearly see the guy paid his bills since college on time every time, then the chance of him/her defaulting on the loan is low...therefore they can state their income. (we don’t and shouldn't’t care if the guy works as a male escort and cheats on his taxes...not our job} Why would a Mortgage Broker be in the business of enforcing tax laws by asking for income documentation unless it is nesseciated by Borrower’s weak credit standing. All we care about is Borrower’s ability to pay back the loan, and this can easy be established through the underwriting process and credit analysis. Whatever the case, nothing ever gets solved by more knee jerk regulations and bureaucracy.