“In other words, if borrowers would not have lied and committed fraud, as many as 70 percent of them may not be facing foreclosure right now”.
 
I am outraged!  Lenders decided to make “stated income loans”….  on the loan application where you/I fill in the amount of our annual income (AND this income is not verified and the mortgage applicant knows it) many/most borrowers misrepresented their income.

Now the lenders are blaming defaulting borrowers for misrepresenting their income on the initial loan application.  So is it the loan officer that invented this loan?  Absolutely not – it was the “bigger wigs” and they received enormous bonuses and or stock options for loan production and profits.   Well they “got their production” and now they will have their foreclosures BUT IT IS NOT THE BORROWER’S FAULT for lying (misrepresenting their income); because when the powers that be decided to make these loans to borrowers with poor credit and no or minimal down payments, they knew they couldn’t qualify BUT they thought that if prices kept escalating everyone would make money and be happy – I thought pyramid schemes were illegal!  

Interesting to see what the lenders will do… the first thing they will probably do is blame it on the mortgage brokers and make more loans “in house”.  This is an easy finger to point without damaging their own employees.   If lenders attempt to prosecute all borrower’s that are in default who misrepresented their income in the loan application… I have inkling that the percentage may be over 75% and maybe near 90% on these "stated income" loans.