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.”
