BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? In the last 2 months, almost all lenders have dramatically curtailed, reduced leverage offered, or stopped offering entirely on manufactured homes (aka wobblies, doublewides, and 'hurricane magnets'). Several lenders have begun announcing the increase of required FICO scores (from 600 up to 620 at a few, 620 up to 640 at others) for loans with 'Stated Income' documentation. 'Over Equity' 2nd loans at 115% of value (virtually ALL lenders sell these to the same, single Wall Street house) stopped accepting income documentation of 12 months' bank statement deposits, and only accept W2s (if you're self employed, regardless of income or liquidity, you're SOL.) I see the ongoing incremental tightening of standards being the trend... cautiously applied in the attempt NOT to dramatically shock the origination industry... ALTERNATIVELY... I am seeing a few counter-trends of lenders getting more and more aggressive with No Ratio income documentation (where employment is verified, but no income need be claimed whatsoever.) I champion these over Stated Income, as you cannot commit income fraud when you don't make any claim of any amounts in the first place. I'd be willing to bet that, when all the dust settles, the industry will find that the fraudulent nature of Stated Income ends up COSTING that pool of loans far more than the risks of non-documentation and non-claim whatsoever of No Ratio loans. (Currently No Ratio loans are priced at a premium to Stated Income loans.) I predict that No Ratio will become far more prevalent, and the secondary markets will prefer them, as Stated becomes exposed for the cesspool of fraudulent notes it is. The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.