Stated-Income Loans Riskier Than No-Docs?

Originating a stated-income loan may hold greater liability for an originator than a no-documentation loan, an attorney indicated at the National Association of Mortgage Brokers' annual meeting.When asked whether this was the case, Bob Simpson, president and chief executive of mortgage fraud recovery firm Investors Mortgage Asset Recovery Co., said he believed that this perception was "right on the money." Mr. Simpson gave a presentation on mortgage fraud misrepresentations and liability in a session sponsored by IMARC equity shareholder AIG United Guaranty. Other market participants who spoke on, or were asked about, stated-income loans at separate sessions also indicated that there are greater concerns in the industry about the products than for others that might be presumed to have higher risk levels, such as no-doc and interest-only loans. But NAMB officials -- who voiced some of these concerns -- also noted that, while some such negatives exist when it comes to new products, they also have their merits. Every new loan product has helped some segment of the population, said Bob Armbruster, the departing NAMB president.