What is (loan, interest rate, credit check, rate)

[MoonlightMadness]

a no document mortgage or loan? Is it legal? Thanks.

[ChipL]

What's a no doc mortgage? It's history, that's what it is

[MoonlightMadness]

My neighbors are looking into this. I was wondering if this is the way alot of my neighbors are buying their homes for $1 when that's supposed to be illegal in Philly.

[janetvj]

Found this definition online:

A type of reduced-documentation-required mortgage program in which income and assets aren't disclosed on the loan application and employment isn't verified. However, a credit check is typically required as lenders are counting on the fact that the borrower has a good credit history. No Doc mortgages usually fall into the Alt-A classification, and will tend to carry a higher interest rate charge, as well as require a higher down-payment compared to a prime mortgage.

In some circumstances, a borrower maybe enticed to use a No Doc mortgage in order to obtain a mortgage which is out of their reach. A borrower should not be persuaded by a lender or mortgage broker to use a No Doc mortgage in order to obtain something that is unaffordable or when a more traditional mortgage is reasonably available at a lower interest rate.

[MoonlightMadness]

Thanx. That doesn't sound like a way to buy a home for $1. Someone had told me that homes are listed as $1 if the owners borrow more than the house was worth. I don't know if that's true. If it is, alot of my neighbors are deep in hock.

[rcarrillo]

A "no doc" loan and buying properties for $1 are different things.... please tell me they aren't getting this "advice" on the late night infomercials, a website or from a book

[rcarrillo]

Janetvj- good textbook definition. It misses the part where back in 2006, they were doing them with 0 down with just a 680 score. Another reason for the problems we now face, all you needed was a score and a pulse and you had a home.

These days I can't think of lenders doing true "no doc" loans even with 25-30% down. Hard money and equity lenders do, but they look at equity alone... credit doesn't even matter in most cases.

[brokerdave]

yea, the "no doc" really referred to the process it took to do. there was literally no docs to process. it was great. i know i did a dozen of these a few years ago with straight forward re-finances at 65% cash-out deals.

[jiov]

isn't this scary? is it only called "no docs"? for a reason or it literally has "No docs"?

[Annemieke Roell]

Originally Posted by MoonlightMadness

Thanx. That doesn't sound like a way to buy a home for $1. Someone had told me that homes are listed as $1 if the owners borrow more than the house was worth. I don't know if that's true. If it is, alot of my neighbors are deep in hock.

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