fishone4 Posted February 25, 2007 Report Share Posted February 25, 2007 My BIl and his wife found a house. they contacted a mortgage lender and got approved. It's a stated income loan with only my BIL on the paper. It states is monthly income is more then what he makes a month. I thik they used his wifes income as well. anyway the lender sent him the papers to sign and he did and sent them back. now they want to get out of this because it seems that this is fraud. What do or can they do to get out of this contract. Link to comment Share on other sites More sharing options...
ybrew Posted February 26, 2007 Report Share Posted February 26, 2007 did they simply get approved or close on the house?If they got approved, simply say they changed their mind and don't want they house. They may lose earnest money.IF they already closed, simply resell the house. Link to comment Share on other sites More sharing options...
sr28b Posted February 26, 2007 Report Share Posted February 26, 2007 I agree with ybrew.I'll also add that the lender requires a 4506 IRS authorization. The form is typically signed and not dated. This enables the mortgage lender to send it to the IRS at any time in the future. So, WHEN does it get sent to the IRS??If the loan goes into default then off the 4506 goes and when it comes back, what da ya know, the loan was fraudulent. How does this benefit the lender?If it's fraud, it can't be discharged in a BK.Have your BIL cancel that deal and talk to Charles about a No Ratio or many, many other programs that may be available to him that DO NOT involve overstating income. Link to comment Share on other sites More sharing options...
firstsource Posted February 27, 2007 Report Share Posted February 27, 2007 A word about stated income loans:With the number of defaults lenders are being very careful on the figures used for a stated income loan. If your LO is using a figure that is based on what the top pay for your job description would be and it is the same or less that the reality for your combined income, then you should be fine. If you are still nervous however, there are some programs that some banks have that will use the higher score of the two-the lower person's score has to be over 500 and the higher score person needs to make at least 35% of the total income. There are also a more standard program called No Ratio. In this case the lender (higher interest rate of course) ignores the DTI (Debt to Income Ratio)Charles Link to comment Share on other sites More sharing options...
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