Need Reassurance and advice on stated loan

STRESSING · Joined: 26 Sep 2007 Posts: 3

Here's the scenerio - We own a house, self employed own 2 businesses for last 4 years. Want to buy prior to selling with Stated Income Loan.
Credit score FICO middle 645, LTV 96%, verification of deposits totals over 300,000.00 for 12 months. Bankruptcy discharged 6 years ago. Zero derogitory credit since prior to bankruptcy. Mtg payments never late for last 3 years. Debt about 2800.00 per month INCLUDING new mortgage payment.

Is it possible? Lender (mtg banker) seems to be taking sweet time and says may need 20% down - getting frustrated and need reassurance - help??

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Most of it I'd say is possible, but you'd likely pay out the nose to accomplish that.

645 score, which puts you in the average-ish range. You're looking for stated income, you're self employed, and you want in excess of 95%.

You're unlikely to find a stated income up to 100% these days that you're going to want to do.

Deposits are not equal to income, so that's not what you'd want to disclose as income.

The largest challenge I'd think you'd have is the LTV and the score personally.

So, the bottom line is I can believe he's having difficulty with finding someone that will fund the loan. More than likely you'll need to find a way to make the loan more attractive to investers(lower LTV is the most obvious way, an extremely high rate another.)

I'm not entirely sure about the alt-a side of things, but if the information hasn't been disclosed then you *might* be able to get away with a no-documentation loan, and at least not long ago you could get those up to 95%, possibly even with the 645 score.

STRESSING · Joined: 26 Sep 2007 Posts: 3

Thanks for responding so quickly. What bothers me is that he gave us a pre-approval letter after the application and everything, said there would be NO problem and we'd probably need 3-5% down payment max (which we are prepared for). Then, on his suggestion, we made a offer, we had the inspections done, paid for the appraisal out of pocket, and put down a good faith deposit of 500.00. Then, after all that, he asked for our bank statements or VOD and told us he's going to have to go on Stated because of the writeoffs on our tax forms making it look like we made less money. Now I'm afraid we paid out all that money for a false positive pre-approval. We could possibly go a little more than 5% but definitely are not prepared for 20%.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

it definitely sounds like you were being strung along. I would call and ask to speak to the owner, (or manager if it's a large company) and explain that you feel you've been lead to believe you had an approved loan when you never did, and that they got you to pay fees based on a false promise. At the very least, get your money back.

alendinghand · Joined: 26 Sep 2007 Posts: 1 Location: Nationwide

If you need help finding a lender let me know I have over 200 Lenders at my finger tips.

STRESSING · Joined: 26 Sep 2007 Posts: 3

Thanks I'll keep you in mind - Should hear something today (they supposedly sent to underwriter tuesday)

I was actually wrong to state 96% - it should have said 95%.

So the scenerio is really this:

Indiana, 163,400 purchase price
Stated Income (or) Bank Statements
FICO 645
95% LTV (is what we are hoping for)
Single Family/owner occupied.

Haplo · Joined: 20 Jan 2005 Posts: 2422 Location: Springfield, IL

Edited response.

Sounds like a bank statement verification is likely the way you want to go. With the subprime market the way it is, stated income loans have become more difficult to qualify for, and many subprime lenders don't offer that doc-type any longer.

So try out the bank-statements thing and let us know how that goes.