{"id":2601,"date":"2020-10-02T10:29:18","date_gmt":"2020-10-02T10:29:18","guid":{"rendered":"https:\/\/businessfinancenews.com\/?p=2601"},"modified":"2021-06-12T22:55:01","modified_gmt":"2021-06-12T21:55:01","slug":"stated-income-loans-california","status":"publish","type":"post","link":"https:\/\/businessfinancenews.com\/loans\/stated-income-loans-california\/","title":{"rendered":"Stated Income Loans In California"},"content":{"rendered":"\n

Stated Income Loans For California<\/strong><\/h2>\n\n\n\n

After the Dodd-Frank legislation piece was passed more than a decade ago (3<\/a>), stated income loans initially disappeared (5<\/a>) as they were partly blamed for the collapse of the housing market (1<\/a>). Some years ago, the Trump Administration passed the S. 2155 (7<\/a>) that even when it did not repeal (10<\/a>) the Dodd-Frank Act (9<\/a>) or the relevant chapter of the USC (6<\/a>), it rolled back several of its prohibitions (8<\/a>). This allowed stated income loans for California to return (4<\/a>) with some modifications (2<\/a>) as we will see now.<\/p>\n\n\n\n

So today, after this new legislation, what are actually the stated income loans for California?<\/p>\n\n\n\n

Stated income loans for California are a variant of loan contracts where the prospective borrower demonstrates his ability to pay with bank statements or other alternative documents at the request of the lender.<\/strong> Californian borrowers can become eligible for a stated income loan without providing W-2 forms, and are only required to submit bank statements issued by his financial institution<\/strong>.<\/p>\n\n\n\n

Situation For California<\/strong><\/h2>\n\n\n\n

These <\/strong>stated income loans<\/strong><\/a> are especially convenient for borrowers in California. The reason is unique in the US. There are many lenders in California that would accept a borrower who cannot offer much than his bank statements and would not qualify for a conventional loan. Heavy competition among lenders is making the requirements easier for prospective borrowers<\/strong>.<\/p>\n\n\n\n

There are many consultants in California who work in Silicon Valley. Many of these, acquire their properties through stated income mortgage loans.<\/p>\n\n\n\n

These are freelancers, self-employed consultants that work as enterprise architects, ERP consultants, developers, or project team leads. They have massive tax deductions. Therefore, they have a very low adjusted gross income (AGI). With this low AGI, they receive little attention from lenders of conventional loans.<\/p>\n\n\n\n

Lenders in California got back on their feet quite rapidly and targeting the large chunk of the market that cannot be catered by conventional lenders, and was originated by these consultants and start-ups related to technology as well.<\/p>\n\n\n\n

Requirements To Obtain Stated Income Loans In California<\/strong><\/h2>\n\n\n\n

Normally, lenders of conventional loans in California, sell the loan to Fannie Mae, who normally purchases home mortgage loans from commercial banks, or big banks or to Freddie Mac, who on their side, purchases home mortgage loans from smaller banks and lenders. With this operation, they gain liquidity to provide more loans.<\/p>\n\n\n\n

However, these stated income loans cannot be sold to these agencies. Therefore, the lender has to be stricter with the requirements.<\/p>\n\n\n\n