The term "no income verified" tells little about the nature or requirements of a particular program. The spectrum of "no income verified programs" ranges quite broadly. Some programs actually require the presentment of tax returns. Other programs require no financial information about income. Yes, there are even programs which do not even require employment or any savings.

Most no income verified programs require signing at or before the closing of the loan , IRS Form 4506 or 8821. These forms authorize the lender to go directly to the IRS to confirm that the amount of income stated on the application is consistent with the amount declared on the tax returns. If a lender so discovers that the income on the application was overstated, the mortgage

may be declared in default and the entire amount of the mortgage may swiftly come due. In other words, consumer beware!

Our motto at Banner is that we are so good at what we do we have no need to engage in fraud. Indeed, it is a federal crime for a borrower to make fraudulent statements on a mortgage application. Therefore, for example, if an applicant is unemployed, the only sensible approach is to use a mortgage program which requires no employment information.

The trick to getting the best rate is to try to assess the relative strengths and weaknesses of each application and direct that applicant towards the most appropriate program at a particular lender. The typical borrower, someone who is self-employed, may not have up-to-date tax financial information or may have earned inconsistent income. For example, however, that borrower may have a strong history of savings and deposits.

At Banner, we strongly recommend assessing the credit history early during the mortgage process to try to help guide the borrower through any potential misinformation.

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