The big news this week is that as of June 1, Maryland Senate Bill 363 went into effect, basically eliminating all lenders from closing any Alt Doc loans (NINA, NO RATIO, STATED Loans) where income has not been documented to show the borrowers can afford the monthly payments. I believe Maryland is the 4th State (West Virginia, Minnesota, Ohio) to pass this type of law. Other States currently have the same bills out for legislative review and vote. What this means is that any loan closing in Maryland must have income documentation in the loan file - pay stubs, W-2s, 1099s, and/or income tax returns, even in cases where the loan program does not require these documents (as many Fannie Mae and Freddie Mac programs with excellent credit do not). If you have clients that are unable to document income, they will not be able to get financing in Maryland, even if the lender has programs available for them.

While the intent of this law is to make sure that buyers are able to afford their homes, there will be some legitimate borrowers (self-employed with significant "paper losses", recently retired, clients in job transitions, etc.) that could be affected. Make sure that your clients are working with a knowledgeable, local lender who addresses these requirements up front so that there are no surprises for you and your buyers and sellers.

As always, I'm available to answer any financing questions that you may have. Feel free to call.