Can someone tell me how either is confirmed by the investor. What's the difference in requirements/conditions..How arent they interchangeable.

Thanks.

Neither are necessarily "confirmed" per se. Sated W2 would be validated using multiple generic sources such as salary.com, as well as common sense. A verification of employment is also used, strictly to verify employer, position/title, and chance of remaining employed there. Although stated wage earners will soon be a thing of the past(MN and CO have already passed laws to discontinue them)

As far as Self Employed, they are heavily driven on assets. Bank statements, atleast two years of business licence, CPA letters, etc.

Oh and hi all, I'm new!

Self-employed is considered more of a credit risk because the business cycles up and down where a stated w-2 has more steady income on average.

Stated loans are real hard to do right now because of the sub-prime fallout and alt-a loans.You can do them but the interest rates and credit score requirements are really high.

It is actually the opposite from super realtor. Stated W-2 is a higher risk. Why because they should not have to go stated if the really make the money. Stated self employed will go stated much more often because they write off a lot of the income for expenses.

True. And not only do they write off a lot more expenses, many expenses never even show up on the personal side. Which means, neither does the income.

For example, I pay for my cars, gas, insurance, credit cards, etc, etc, directly through my corporation. Which means those expenses don't have to be paid from my personal income -- which in turns means I can keep my personal income that much lower.

Well that's not true at all you have many people in professions where they undereport there tips so they have to go stated.

Loan companies don't care how much you supposedly make they care about and go about what you claim on the tax returns period.

From the other post if you think fha will do a 100 or a 97 percent loan for a 537 credit score I would like to see that magic.

All the mortgage broker I talk to see a higher rate and risk with self-employed because as a BUSINESS the incole is more volatile.One month you can do 10k then next 0.

This is why self-employed usually requires at least 2 years of tax returns.

Stated income loans are fast becomming a thing of the past. Most lenders stoped doing them and the one's that still do have a max. of 80% loan to value with good credit. Several states have passed laws banning them and Congress is trying to do the same.

First of all. FHA IS NOT CREDIT SCORE DRIVEN.

Second of all. YOU DO NOT NEED YOUR TAX RETURNS ON A STATED FILE. THIS IS WHY IT IS CALLED STATED.

True FHA isn't score driven but usually the people that have low scores have debts the FHA would make them pay off and these people usually don't have anymoney or they would have paid off there debts long ago.It's a case by case basis.

Not to bump a dead topic, but I'd like to clarify a couple of things you both commented on.

1) Mortgage Master: Although no, tax returns are not required in the file, the 4506T is. I could go on for hours about the importance of this disclosure in today's market, but I think it's common sense.

2) Super Realtor: It's not so much case by case with FHA. It's more of understanding compensating factors. I just had a woman with a 411 mid and no reserves go through FHA, because she had great work history, no other debts other than her mortgage, and I was saving her over $500 a month.