Stated income lenders are financial services companies that offer home mortgages to customers without requiring proof of the customer's income. Lenders who provide this type of loan generally rely on a customer's assets to provide proof of ability to repay the loan, and the loans are only available to investors or others who do not intend to occupy the home they are purchasing, according to Michelle Conlin and Peter Rudegeair for Reuters.
Lenders that offer stated income loans are generally small- to mid-sized nonbank mortgage companies, explains Gina Pogol for LendingTree. The loans usually require a large down payment, excellent credit history and documentation of sufficient assets to repay the loan. Stated income loans are also called alternative documentation loans, nonconforming loans, portfolio programs or asset-backed loans. Most lenders do not offer stated income loans because they are not considered qualifying mortgages and therefore cannot be sold as mortgage-backed securities.
The Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010 requires mortgage lenders to assess a borrower's debt-to-income ratio and verify the income before issuing a qualified mortgage, notes the Consumer Financial Protection Bureau. As of 2015, lenders offering stated income loans include Unity West Lending, Westport Mortgage, Western Bancorp and National Mortgage Service, states Conlin and Rudegeair.