Stated Income: Out of the Fat into the Fire

Fire In my August 13th post, I defended ‘stated income’ as a legitimate tool in making a loan. In this post, let me be sure I have been crystal clear:

Telling the borrower what to put down for stated income, or even knowing that they are lying, can put you right in the hot seat when it comes to fraud.

Check out the article Truth or Consequence: Brokers, beware: Overstating income on stated-income loans is fraudulent by C. Robert Simpson, CEO and senior legal counsel of Investors Mortgage Asset Recovery Co. LLC (IMARC). Simpson says “If a loan officer knows a borrower’s true income and purposely misstates it, is it fraud? Simply put, the answer is yes.”

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Linda Keith, CPA

Linda Keith CPA is an expert in credit risk readiness and credit analysis. She trains banks and credit unions throughout the United States, both in-house and in open-enrollment sessions, on Tax Return and Financial Statement Analysis.
She is in the trenches with lenders, analysts and underwriters helping them say "yes" to good loans.
Creator of the Tax Return Analysis Virtual Classroom at www.LendersOnlineTraining.com, she speaks at banking associations on risk management, lending and director finance topics.