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[tony la]

No, I don't mean like it was.  But it is kind of like you have 3 people in the front seat of a car and the car is out of control and all three people have the hands on the wheel. 

It is kind of overkill rite now.  Self employed people are taking the hit for what happened.  Rite now it is pretty tough to get a loan for self employed.  That was the loophole which was used in the last 4 years.  I had a home in Little Village for sale last week and 7 different people wanted to buy it and only one could qualify.  Now that payment was $825.00 per month on a 30year fixed.  It should not be that hard to qualify on a loan of that amount(107,000). But they are trying to correct the damage that was done.  I understand that.

What kind of documentation to you have to have that is acceptable by a lender if you are self-employed?

The bottom line is that it is almost impossible to get mortgage insurance for a no documentation loan.  The no documentation loan was put in place for the person who has a ton of assests.  But does not show a lot of income on their tax return.  In order to get a loan without having to pay mortgage insurance 20% down is required.   At this moment with a 680 credit score and 10% down you can get this loan.  After July 1, 2008 the state put in a very ambiguous law that requires mortgage companies to prove that the borrower can pay for the loan.  A good law in spirit, but a little rough around the edges.  Sounds like to me they made a law to make it look like they are doing something about this mess.

IMHO the no doc loan was a good loan for certain people.  Absolutely not everyone.  Mortgage people new to the business saw this loophole, they capitalized on it.  They put everybody and their brother on a no doc loan.  Janitors that made 22k per year now made 44k per year on paper and fraud.   I have one gentleman that takes home 2500 per month and has a mortgage of 1850 per month.  I did not sell him the house but he can not afford it any longer and I had to sell it through a short sale.   

Do not get me wrong.  Changes had to be made.  We are just now finding out all the fraud that was out there.