Stated income loans are starting to come back into the market as lenders try to boost business, but this time around lenders are putting in extra due dilligence to not repeat the past. Per Reuters:
Lenders say these aren't the same products as the so-called "liar loans" that were pervasive before the housing bust. Instead, the loans are going to borrowers such as small business owners or investors buying properties they intend to rent who can demonstrate an ability to repay, verifiable through bank or brokerage statements.
"This is not a return to the wild and wooly days of, if you fogged the mirror, you can have a loan," said Paul Lebowitz, founder of Westport Mortgage. "They have a smarter edge to them now.
But stated income loans are not the only way lenders are adapting to the restricted lending environment.
Wells Fargo (WFC) has increased its loan officers’ top commission rate to 70 basis points, up from the previous commission rate of 63 basis points. The changes took effect on July 1.
“By adjusting those tiers we created a lot of desire for the loan officers to go out and get that extra production,” Franklin Codel, who oversees mortgage origination for San Francisco-based Wells Fargo, said in a phone interview. “This creates that little extra incentive.”
