“Stated”

Many times a borrower or broker says they can not go Full Doc and must go Stated. This is not necessary most of the time. A lender can roll the loss from the taxes back into the loan to show the profit. Losses such as traveling expenses and car payments can be added back into as profit, as well as one time charges like a new roof. (and there are many more examples) Structuring this as a Full Doc loan will result in a stronger deal, better rate, and better terms. Knowing how to structure this part of the deal and getting the tax returns will keep you competitive against your experienced competition who would know how to structure the deal and go full doc.

When you ask the borrower for the tax returns and they immediately respond negatively, this is your shot to show why you are an expert. At this time educate the borrower about adding back in losses, this will create value in your word and ultimately trust. Explain to them it doesn’t hurt their chances to get a loan, it actually does the opposite and improves the chances. Let the borrower know showing taxes only gives you and a Lender a full picture of all options and avenues. If you get the taxes and are not sure how to determine let the Lender make the decision if the loan needs to be Stated or not. During a purchase the borrower doesn’t always need to have income that will support the property the property should support itself. Your borrower doesn’t need to be $1 Million liquid to buy a property or have the best taxes ever. A Lender will care about the income the property is making, not what the borrower makes before owning this property. * Currently in the Market Stated is getting more and more difficult to close with most Lenders anyway. So knowing what to do is key. Investor Stated is not happening anywhere from what I see, and this will remain until Lenders start getting aggressive again.