Citi Starts the Death March of Stated Loans in Earnest

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Citi released some guideline changes in the wholesale changes that can be described easily as the first big step towards killing stated income loans. I’m not sure if these are reflected on the retail side as well. The big changes? 75% max loan-to-value on rate and term refinances with a minimum FICO score of 720. That guideline change essentially narrows the universe of qualified borrowers to a thin sliver of the home-owning population these days.

Other details on the stated income guideline restrictions:

70% max LTV on cash-out refinances

Increased FICO requirements from 660-720 to 680-720 for SIVA

Increased FICO requirements from 660-720 to 700-740 for SISA

Click the thumbnail below for the full details:

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Viewing 15 Comments

Freedy Mac Daddy 1 year ago 1 point
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I'm still surprised that they're still holding up. The level of service is horrible to start off with, and, the way their underwriters were approaching Stated deals was a nightmare. Speaking with my fellow colleagues in the industry, a very high percentage of Stated files were being countered to Full Doc anyhow.

Only if they would hire that monkey who throws darts at the stock listing page to pick stocks. I'm sure he could run their ops a little better.

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morganb 1 year ago 1 point
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there's some great articles on the influence of the foreign funds they've
taken on and the direction they're pushing the company. should be an
interesting next couple of quarters.

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JRB 1 year ago 1 point
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Citi has been tauting the SIVA & SAs for ever. We have not gotten even one file through without UW coming with a counter for FULL DOC. They're merely attempting to get people in the "door" in hopes that nobody will just turn their asses around and walk right back out after the counter-offer.

25% equity huh.....that's about .000010% of the population now. Oh and 720 mid, well that's about .0000015% of the population right now. Read the news lately CITI, things aren't looking so good. If you want to kill the programs then kill the damn programs. STOP WASTING OUR TIME IDIOTS.

CITI is about to be wiped off the map by their ALT A's anyway and they know it as evidenced by their selling off of every asset but the kitchen sink. They're in BK or being bailed out in less that 12 months. Mark my words.

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morganb 1 year ago 1 point
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JRB - such a good point. i think the new program guidelines are relevant to
about 15 people. why even have the product?

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the man 1 year ago 1 point
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That is what we were offering at WF before we stepped out. You still have sisa so be thankful, better than not having it.

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morganb 1 year ago 1 point
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sisa to 70% - i don't know too many folks who are stated at 50% ltv - but if
you could find them!! :)

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Unknown 1 year ago 1 point
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I work at Citi and concur we do not want the stated loans. It is dumb founding to me to even offer a product that can not be ahieved. However I must add that the quality of loan coming in the door is very poor at best. They are treating agency loans (DU) with documentation relief as stated too. They have lost their minds.

I need a new job, please help!!!!!!!!!!!!!!

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Chuck 1 year ago 1 point
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Citibank is pretty much insolvent the last thing they need to do is fund RMBS as evident by the new released guideline wholesale changes, they are cash strapped but still want to act like the lions in the business....get real,,,

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morganb 1 year ago 1 point
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i agree - it seems like they're giving away their company for a few billion
here and there every week...

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J 1 year ago 1 point
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Stated loans are were you look for them. [Self Employed White Collar], They Own the company no matter what it is, they dont work in their company they are not part of the staff/ hired help, they live in prominent neighborhoods, they have educations of bachelors or Masters Degrees, Their companies operate out of offices and employee staff, they usually have some business license designation of some sort. Their personal finances and business finances exist seperately. "THIS IS STATED SELF EMPLOYED" Not small business! Not Mom & Pop. Not back seat operate out the back of the trunk business. You either make money or have others make it for you with out lifting a fingure it's that simple.

Stated wager earners and weekend thousandires don't count. I even have a problem with commission driven sales jobs, that is also not consistent and usually cyclical. Stated is a very very small elite group of borrowers who have available assets to use if nessesary.

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Tobby 1 year ago 1 point
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Nothing wrong with old school stated-stated. It's the LTV stupid!

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Peter 1 year ago 1 point
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For those of you who got into the mortgage business during the boom, stated income loans were ALWAYS intended for a "thin sliver" of the population. These loans are meant to be used to provide access to mortgages to individuals with income from comission paid jobs, business owners, and large amounts of investment income. They were never intended to be used to allow inflation of income to "make income fit". Prior to 2003, Washington Mutual's 75% LTV, 680 mid score, PROVEN liquid assets matching 6 months of the stated income was a generous program. Stupid lending got us into this mess, All we are doing here is returining to sanity. It's going to be a painful ride for those sitting on the bubble as they fall to earth.

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morganb 1 year ago 1 point
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Peter - you're exactly right. a return to our senses is the only way out.
i think it is great they are headed towards sensible underwriting - it is
the fastest way out of this mess.

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Mortgage Professor 1 year ago 1 point
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JRB,

Are you the monkey or the donkey?
Peter is right - this is a return to normal guidelines.
When does your shift start at Friday's?

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downtrend money maker 1 year ago 1 point
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If I had to choose...the monkey! At least he gives the Dow a run for it's money by picking winners!!! One would have to be a "donkey" to stick up for Citi and the greedy investors who led everybody into this mess in the first place.

Given the market environment, I agree that we have to get back to sensible underwriting but please... the lenders lay out a big banquet of products for us to feast on, they are happy themselves because they belive they are making money with no end in sight, then finally realize they are loosing money due to certain economic downturn; then what do they do? They scoot us out the door and close it behind us and blame us for taking their product and selling it when they laid it out in the first place. Give a man a tool and he'll use it, no?

As professional businessmen, one would be foolish not to seize opportunities, right? With that said, I don't put 100% blame on the banks, but don't solely defend the lending practices of the banks. We all need to share in the blame. Oh, and forgot to address the service. It's HORRIBLE to say the least, and that I solely blame on Citi's management.

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