HELOC using bank statements or stated income

jwheel113 · ‎03-22-2020

Hello. I was wondering if anyone can suggest a lender who might do a HELOC that verifies income for a self-employed borrower using business/personal bank statements or stated income in lieu of tax returns? This would be for a primary residence in Illinois. Thanks!

Revelate · ‎03-22-2020

@jwheel113 wrote:
Hello. I was wondering if anyone can suggest a lender who might do a HELOC that verifies income for a self-employed borrower using business/personal bank statements or stated income in lieu of tax returns? This would be for a primary residence in Illinois. Thanks!

HELOC underwriting is all over the map; I doubt anyone underwrites on stated income though TBH.

I have no direct experience but seems like bank statement HELOC's are pretty common via Google, no opinions on the lenders I saw on a quick search.

jwheel113 · ‎03-22-2020

When you actually dig into the search results they aren't prevalent at all. What is somewhat common is a bank statement mortgage for self-employed borrowers. No problem finding those. I haven't come across a single Home Equity product that states they can use bank statements instead of tax returns to verify income. I'm not convinced they aren't out there but they're not advertised that way like you see with actual mortgages. Please feel free to correct me if you've seen something to the contrary.

Revelate · ‎03-24-2020

Well it's possible:

https://www.ocregister.com/2018/06/21/self-employed-can-get-seconds-and-helocs-with-bank-statements/

But you'll probably have to dig through stupid results to find actual lenders to your point.

jwheel113 · ‎03-24-2020

@Revelate wrote:
Well it's possible:

https://www.ocregister.com/2018/06/21/self-employed-can-get-seconds-and-helocs-with-bank-statements/

But you'll probably have to dig through stupid results to find actual lenders to your point.

Thanks! This article looks familiar. I may have ran across it awhile back when I started looking into this. I just emailed the author to see if he has any referrals. I'll post his response if I get one.

jwheel113 · ‎03-24-2020

I was informed by the author of the article that these products are no longer available and the entire category of Non-QM loans has disappeared.

Revelate · ‎03-25-2020

@jwheel113 wrote:
I was informed by the author of the article that these products are no longer available and the entire category of Non-QM loans has disappeared.

That's interesting and I had missed that actually.

I just checked Cashcall Mortgage (who always helpfully publishes their rate sheets) and you're right: all of the non-QM loan options are flatly gone and they used to offer several of them.

jwheel113 · ‎03-25-2020

@Revelate wrote:
@jwheel113 wrote:
I was informed by the author of the article that these products are no longer available and the entire category of Non-QM loans has disappeared.
That's interesting and I had missed that actually.

I just checked Cashcall Mortgage (who always helpfully publishes their rate sheets) and you're right: all of the non-QM loan options are flatly gone and they used to offer several of them.

I'm continuing to test his theory by talking to as many mortgage professionals as I can in this space. I've concluded that if 100% of non-QM hasn't disappeared overnight (realistically in the last 1-2 weeks) probably 98-99% of it is gone. Below is the response I got from one of the "Pros" I spoke to this morning:

Unfortunately most of our lenders have suspended these loans do to liquidity issues in the bond markets right now. The ones that are still doing these loans have tightened up lending guidelines particularly towards the LTV or down payment amounts. We were just recently doing loans at 90% loan to value and the ones that are still doing these are closer to 75-80% right now. We do anticipate lending in these areas to increase again as the Corona Virus start to subside and markets begin to return to "normal."

jwheel113 · ‎03-25-2020

On a positive note, most lenders I've spoken with who are active in the non-QM space seem to think that these types of loans will resume as quickly as they disappeared, once conditions improve. If/when that actually happens or not remains to be seen.