Virginia mortgage rates and industry news

Just a few months ago, almost anyone could get a stated income mortgage.  Whether you had good or bad credit, no money down, or needed a jumbo loan, it really didn't matter!  So, what is a "stated" income or "liar" loan?  In short, banks and lenders would allow the borrower to claim an income on their application without documenting the income was in fact accurate.  If you told the bank you made $8,000/mo, you didn't need to back that up with paystubs or tax returns (provided the income you stated was reasonable for your profession)   Let's face it....if you're self employed or highly commissioned, you may make A LOT more money then you actually claim on your taxes (after appropriate right offs, etc).  You may be able to afford a really expensive home, but you have serious problems verifying all of your income to qualify for the mortgage.  These types of loans have been available to borrowers for quite some time now, but what if they disappeared?

It's estimated that as much as 40% of the work force, categorized as a "move-up" buyer, is either self employed or highly commissioned.  If this type of loan goes away, how will this type of borrower get financing and how will this affect the real estate market and our overall economy?