Tuesday, November 29, 2005

Some real "classy" marketing...unbelievable

So I happened to accidentally click on one of those google mortgage ads while I was using my laptop (my wrist bumped the little finger pad while typing.) I didn't think anything of it, until I started reading a quick snip of how they described "stated income".

Check out this explanation of stated income from a broker website. I cut the part out that I want to talk about, and put it below.

"No Doc / Stated Income Loans are the most commonly used and least expensive product in the reduced or no documentation suite of programs. These loans are often the perfect choice if you have verifiable employment (self employment is fine) and assets but your verifiable income is just a little low for what you want to do."

That is NOT the intended purpose of stated income. It was designed for people with hard-to-document income, usually self-employed borrowers. It is NOT designed so that you can LIE and say you make X so that you can afford Y. That is just blatantly saying "it is OK to lie on this loan", and not only that, but that is how they are marketing the loan!! The problem is that they are by no means the only one that will tell a borrower to "just state more income" so they can "do what they want" to accomplish. PLEASE don't let people fall for this rationale and end up buying way more house than they can afford.

OK, hold on a sec....I was clicking through this website some more and I'm finding even more great "information"...yeah right! Check out this explanation for "no-doc" loans...

""Mind Your Own Business" or "No Doc" Loans
Have you ever wanted to tell a lender to mind their own business? Well, now you can. If you're turned off by the invasion of privacy and the hassle of paperwork that usually goes with getting a mortgage loan, we can help. At California-BadCredit.com we offer loans that allow you to keep your business to yourself.

Let's face it, it takes lots of time - and even accountant's fees - to collect all the paperwork that most lenders require. Pay stubs, 1099s, W-2s, tax returns, bank and brokerage account statements, you name it - they want it all.

For people who prefer a high degree of personal privacy and low degree of hassle, we offer No Doc loans. And when we say No Doc, we mean it. Zero, nada, nothing, zilch!

Depending on the loan program, you simply need to be able to claim enough income to qualify for the loan and show enough collateral to secure it. In addition to no documentation, your application won't even list information about your income, employment or assets. Generally, these kinds of loans are only available for people with good credit and tend to be a bit more expensive than loans with standard documentation. But that can be a small price to pay if your financial life is complicated or high profile or if you simply would rather keep it yourself.

What's more, if you're considering a purchase, a No Doc loan can get go up to 100% loan-to-value. Some programs, such as "103s" will even pay closing costs so you have no out of pocket expenses. That way you can use your extra money for things you'll need for your new home, like furniture and gardening supplies. "

So wanting to BORROW money from somebody is an "invasion of privacy"?? Are you kidding me?!?!? Like it is REALLY hard to get a W2 and a most recent paystub to verify your income? Yes, some are a lot more complex, but from what I have seen, very few people fall into this "complex" criteria where verifying their income is THAT hard.

So there you have it...check out the website to see it for yourself. I have seen their ads on all of the "bubble" blogs, and I'm sure it has even rotated through this blog. The good news is that most people visiting here won't be falling prey to their marketing.

Are you really surprised that people making 40k a year are able to get loans for $400k condos?!?!?


Blogger utahmortgage1 said...

This comment has been removed by a blog administrator.

11/30/2005 10:41 AM  
Blogger SoCalMtgGuy said...

I agree with you.

I just happened upon that website accidentally.

Most companies have multiple websites feeding people to the "same" place.

Thanks for the heads up on those sites.

11/30/2005 10:43 AM  
Blogger Chip said...

"Are you really surprised that people making 40k a year are able to get loans for $400k condos?!?!?"

No, unfortunately, I'm not surprised -- I just hope that all of the people who have wilfully skirted the law pay a price. Makes you wonder how much these people added to the price bulge.

11/30/2005 12:07 PM  
Blogger Chip said...

Just noticed -- somebody posted, to draw a rely from you, then deleted their post. That was tacky.

11/30/2005 12:08 PM  
Blogger Metroplexual said...

What sites did the tacky guy mention?
And what is their significance?

11/30/2005 12:43 PM  
Blogger utahmortgage1 said...

Not trying to be tacky. Posting links will simply give these marketing a-holes better standings in the search engines. I realized this after posting the links. This blog has really good PR and I would hate to share it with marketing sites. There wasn't any significance beyond pointing out there are other sites that have very similar content.

11/30/2005 1:20 PM  
Blogger SoCalMtgGuy said...

Utahmortgage is correct.

It was nothing more than 2 links for other companies that had identical things posted on their websites.

UM was just illustrating that the website I saw is NOT the only one selling these products in that way.

Chip...the problem is that "stated" income is pretty much a "liars" loan. Lying on an application is fraud...but how can it be fraud, if every bank is offering stated income?!?!? a nice catch-22.

Yes, the income being stated is supposed to be "reasonable", and yes they check salary websites...but when it comes down to competition and getting the deals done, more often than not...the lenders make the deal. They don't want to lose business to competitiors.

11/30/2005 4:54 PM  

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