Stated Income Mortgage

Stated-Income Verified-Assets Loans (SIVA) are a type of loan program in which the lender
banks do not require the loan applicant to furnish income documents such as pay-stubs, W-2's
and tax returns. The funds that will be used for down payment, settlement costs, and as
reserves after settlement will be verified by the bank. Although income is not verified, the
borrower's employer will be contacted to confirm history of employment and likelihood of
continued employment.

SIVA mortgages are often used by home buyers who have complicated incomes, who have
hard-to-prove incomes, and those who do not want to hand over their personal income
documents. Home buyers who work in professions where a significant portion of the income
comes in the form of cash tips often use Stated Income Verified Assets loan programs. Waiters
and taxicab drivers often make more than what they can show for on their pay-stubs. This type
of loans are also preferred by self-employed borrowers and those who are commission based,
because the income documentation of the Self-employed are closely tied to their business
incomes and can be a hassle to gather, and the commission based professionals often have no
regular pay-stubs and have difficulty proving the stability of their incomes. Small business
owners are usually required to provide a letter from a certified accountant stating the fact that
he owns the business and it is not in financial trouble.

Banks require that SIVA mortgage borrowers to have good credit profile. Most stipulate that the
credit scores be above 700 with no adverse credit history. Although some lenders offer State
Income programs with lower credit scores, borrowers often are charged higher interest rates.

Unlike Stated Income Stated Assets mortgages, the assets of SIVA mortgage applicants are
verified. Lender banks expect applicants to furnish bank statements of depository accounts and
stock securities accounts where the funds to be used for down payment and settlement costs
are held. There should also be reserve funds of at least two months worth of mortgage
payments after settlement. In addition, some banks call or write to the account hosts to verify
the validity of the funds.