“And I would be willing to “surmise” that you cannot substantiate that assertion.”

Simple logic -

If you have the income on your 1040, or as profit in your corp, you don’t need a no doc, you don’t need to pay an extra 2% on your loan.

Name one, ONE reason to pay an extra couple of points on your loan that doesn’t involve defrauding the originator (either by the borrower or the broker) or defrauding the US Gov’t.

Name ONE, and I’ll stop. I’ve yet to hear one valid reason.

That you don’t provide one is proof of my argument.

The example already given in this thread, the Physician’s Corp, I’ve already addressed. Most other examples I’ve heard are of a similar vein, in fact, *all* other examples I’ve heard were of a similar vein. Or do you disagree? If the corp doesn’t have a profit, it’s not income for the owner, and you are lying to the originator. If it does have profit, you don’t need a no doc.

If it’s so obvious that I’m wrong, then a single example should be easy to come up with, shouldn’t it?

Let’s see.

Many pay consultants found they could attract more referral business by inflating their appraisals to whatever the selling price was priced at. In a boom, it became easy to justify such fraud by using similarly priced packages. Any basis of intrinsic value could be ignored, so long as “comparable” pay packages sold for similarly over-priced amounts.

The overuse of comparables helped justify prices that were increasingly unsupportable. As prices spiral upwards, the use of comparables becomes meaningless. High prices justify higher prices.

Sounds right to me.

“I would be willing to surmise that probably 90%+ of no-doc loans involved some type of fraud.”

And I would be willing to “surmise” that you cannot substantiate that assertion.
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I sympatize somewhat with those lower level professionals who were basically left with the choice of going along (participate), or lose so much business that they could no longer make a living. They were in part victims of the neo-con-men in our government who did not understand that the beast of free market forces must be controlled at all times, to make sure it’s powers are used to build society not to destroy it.

There has been fraud on every level from byers to investment banks with the motive of making a quick buck. However, the only ones that could credibly claim to not understand what was going on, is the J6P who purchased a house. For the regular J6P purchasing a house is done by professionals he hire, and he just signs on the dotted line after the loan officer has filled out the form. Why would he trust their word rather than get a 4-year college education so he can understand what he signs? Well besides the obvious, it makes absolutely no sense to him that the bank would get him into a house he could not afford, because he know that in a forclosure everybody lose money.

For those arrogant financial types who say that J6P should have known what he signed/got into, remember that we all end up having to relly on advice of professionals at some point in time. If you are stupid enough to take the advice of your doctor and start taking isoniazid even though you are already taking carbamezepine, is it then your own fault when your liver fails a week later?

The problem is with a society that has made it a crime when J6P robs the rich with a gun, but when the rich robs him with a pen, it’s just the free market laws of nature – if not J6P’s own fault. Thank god that every now and then the pigs that have set this up, get hit in the face with their own s**t. Otherwise we would end up with a “tar, feather and pitchfork” revolution and that would be bad for my stock portfolio.

I don’t think that hiding income from the IRS could be considered a wholly legitimate use of no-doc! lol Maybe they’re not cheating the lender, but they are cheating someone else.

Appraiser (and I use this term loosely):

How much do you want that house to be worth?

Owner (and I use this term loosely)

“How about $125,000.”

Appraiser:

“OK”

This sort of detailed appraisal went on for 55 houses. End result the “owner” took second mortgages on all 55 houses and lived high on the hog, pretty much just like much of this country.

What a country. But fraud in Iraq included
shoveling billions of US tax dollars out of the back of pick ups, pretty much no doc loans. So I guess all fraud is relative. But if there is one thing this country has a lot of it’s money, and since debts don’t matter, where’s the problem, just quit whinning and work harder and pay those taxes.

PS: I agree that Greenspan deserves much of the credit for the real estate bubble (as well as the tech bubble etc.) All bubbles are liquidity driven and Greenspan certainly provided the liquidity.

A mere unsubstantiated belief.

I would be willing to surmise that probably 90%+ of no-doc loans involved some type of fraud.

If there is cash-flow that is not on an applicants 1040 an overwhelming majority of those are going to involve tax-fraud.

If there isn’t cash-flow or assets that match the applicants state no-doc loan, then there is mortgage fraud.

The sniff test is that why would someone pay 1.5 to 2.0 full points higher for a no-doc loan if they are not trying to hide something. If income/assets are legit, there is always paper trail.

“Again, there is no non-fraudulent reason for a no doc loan.”

A mere unsubstantiated belief.
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