Recently, I had the opportunity to present John King of Wells Fargo Private Mortgage Advisors about the availability of stated income home loans.

Are Stated Income Home Loans To Blame?

Stated Income loans have been blamed for the financial crisis and have often been described as liar loans – where the home buyer lies about how much money the make or even if they are employed!

a photo of John King - Wells Fargo Bank, Private Mortgage Advisor

John King - Wells Fargo Bank, Private Mortgage Advisor

In spite of this stigma, the original lending philosophy of these stated income home loans may not have been that flawed.

Basically, home loans are based on risk.  The more income you have, the less inherent risk is involved with you being able to make the payment.  In addition, the original no income loan programs swapped the risk connected with no verification of income with a substantial increase in down payment and money in savings.

The more of your own money you have invested in the home purchase, the more likely you will be to make the house payment, no matter how much you earn.

Let’s hear what John King has to say about stated income home loans:

Robert Lilley Brokerage: “Welcome, John – It is always good to see you! Tell us about Stated Income home financing.”

John King: Well, (laughs) if you ask those Self Employed Buyers who have been using this form of income documentation for many years, they are saying “When will it return!”

If you ask a Capital Markets Executive (Those who buy and sell Mortgage Backed Securities) they say “We hope never!”

If you ask a politician they say “Not right now… unless it affects my ability to get re-elected!”

RLB: “Yes, a far cry from a few years ago when stated income was used merely a lazy way to provide home loan qualification documentation!”

JK: “In today’s mortgage market, I see guidelines getting more conservative, giving us much less ability to offer those who would have “properly qualified” for stated income loans back then.

Recently, however, a specific niche product offered through Wells Fargo Bank does allow for a borrower with significant assets to qualify for a loan using these assets as a basic for the income qualification.”

RLB: (laughs) “And I’m sure you are dying to tell us all about it!”

JK: (laughs) “Well, of course!  Seriously, this “Asset Dissipation” calculation is an exclusive product that can allow a buyer/owner who has considerable assets and not much income showing on their IRS1040’s to possible qualify to either Purchase or Refinance a home in today’s market.”

RLB: “So, all I have to do is go into a Wells Fargo Bank branch and ask about this stated income product?”

JK: “Well, not exactly.  Not all Wells Fargo Bank loan officers have this program available to them.  You must consult a member of the Private Mortgage Advisors team.”

RLB: “Like you?”

JK: “Yes, I am proud to say that I am a member of the Wells Fargo Bank Private Mortgage Advisor team”

RLB: “How difficult is it to get more information on this loan program, John?  If not all Wells Fargo mortgage bankers have it available, how would a home buyer find out more about this?”

JK: “Just send an email to me and I will be happy to provide details.  It may not be right for every home buyer in every situation, but it could be another method of buying that perfect home for a particular buyer who could not otherwise qualify for a home loan.”

RLB: “Thank you again, John!”

Contact John King of Wells Fargo Bank Private Mortgage Advisors LLC, an Affiliate of Wells Fargo Bank NA

This interview is not intended as an encouragement to borrow money or use financing to purchase a home.  It is merely an informational item, keeping you informed about some of the options available when purchasing a home.

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