Stated Income loans do exist in Utah, they are just hard to find. The “mortgage meltdown” caused most of the sub-prime lenders that participated in stated income and challenged credit mortgages to shut down. Congress also has put major pressure to cease any stated or no income loans. In fact, they have made it quite difficult for anyone who has an owner occupied property with conforming loan limits to get a stated income loan although, it is possible.
Stated income is back if you have a commercial, investment, raw land or are over the conforming loan limits of $417,000. Congress has, for the most part, stayed out of these types of properties because they are mostly worried about homeowners being kicked out of their primary residence. They also figure that if you have a loan amount of over $417,000 you are savvy enough to understand the risks of foreclosure.
A stated income mortgage can be useful in some cases, but it can be also abused. In no way should the loan program be used to just get a larger home and to extend ratios beyond the ability to be paid back. A good use of the program would be the self employed borrower who wishes to not prove income through traditional methods.
I personally have worked with hundreds of self employed borrowers and their tax returns can be hundreds of pages and very complicated. Underwriters are not tax advisers or accountants, yet they are placed with the burden of trying to decipher the tax returns without the proper background to fully understand the return. This results in the request for extra documentation from the tax preparer and borrower. The tax preparer sometimes is unwilling to cooperate especially if you are dealing with the larger chains and this alone can result in a declined mortgage loan.