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A stated income loan is a mortgage where the lender does not verify the borrower's income by looking at their pay stubs, W-2 (employee income) forms, income tax returns, or other records. Instead, borrowers are simply asked to state their income, and taken at their word. These loans are sometimes called liar loans or liar's loans. [1]
Among Alt-A securitizations, 80% of loans issued in 2006 had limited or no documentation. As William Black, a former banking regulator, testified before the FCIC, the mortgage industry’s own fraud specialists described stated income loans as “an open ‘invitation to fraud’ that justified the industry term ‘liar’s loans.’” [13]
With a bank statement loan — also known as a stated income loan — you won’t need to provide your lender with some of the typical financial documents needed for a mortgage, such as W-2s and ...
No income, no asset (NINA) [1] is a term used in the United States mortgage industry to describe one of many documentation types which lenders may allow when underwriting a mortgage. A loan issued under such circumstances may be referred to as a NINA loan or NINJA loan .
There is one surefire way to reinvigorate the housing industry and it's such a simple solution that regulators should be embarrassed they have to be reading about it here: Re-institute the liar loan.
Income fraud: This occurs when a borrower overstates his/her income to qualify for a mortgage or for a larger loan amount. This was most often seen with so-called " stated income " mortgage loans (popularly referred to as " liar loans "), where the borrower, or a loan officer acting for a borrower with or without the borrower's knowledge ...