I just received an email here in Cookeville TN from a out of town lender promoting the return of stated income or “No Doc Loans”. According to the message, the lender-required credit score is only 650, the borrower doesn’t have to verify any personal income, and can receive a loan for up to 75% of value of the property.

It all sounds good. Too good.  “No Doc” loans made with no documentation were a real problem with the national real estate loan market in the mid-2000’s. Homes were bought and re-financed based on a minimal list of verifications.

The Cookeville TN real estate market saw some “No Doc” loans during that time period, but most local lenders were more conservative, requiring more extensive documentation before approving the loan for home buyers or land buyers.  As a result, the Cookeville TN real estate market experienced a much lower foreclosure rate than most parts of the country. Cookeville TN area home values remained higher, too.

Everything has its place; “No Doc” loans are no exception. They work well for a certain type of customer. But they are not the best option for most home buyers. Home buyers, find a loan officer you trust and respect. Visit their office and talk face to face. Listen to your options. And remember that if it sounds too good to be true, it probably is.

Cookeville TN REALTOR® Brenna Piper, ABR, has worked with American Way Real Estate since 2002. A former television news photographer and corporate marketing director, she provides accomplished marketing and negotiating services to sellers and buyers across ten countries of Tennessee’s scenic  Upper Cumberland area.