Late last week, I got an email from a lender with something I haven’t seen for a while — a stated income loan offering.

Are stated income loans making a comeback?

They are at one lender – which means that other lenders are likely to follow suit soon.

Highlights of the Stated Income loan offered at this lender:

• 720 Minimum Fico Required
• Self Employed Only
• 70% – $1,500,000 Purch./Rate – Term — Owner Occupied
• 60% – $1,500,000 Cash Out — Owner Occupied
• 60% – $1,000,000 Purchase — Non Owner
• Second Homes Allowed at 5%-10% LTV Reduction
• Maximum Cash Out — $325,000
• 12 Months PITI Reserves Required
• Minimum Loan Amount—$417,0003/1; 5/1; 7/1; and 10/1 ARM’s
• Available Rates start in the mid 4’s and range to the low 6’s
• Programs Available For Most States

Stated income loans were popular during the big real estate runup of the early-to-mid 2000′s – and as the mortgage boom turned into a mortgage bust, all lenders that I was aware of eliminated their stated income loan offerings.

But in true business-cycle fashion, given a little bit of time – at least one lender is now back in the stated income game. And if my suspicions prove out – I bet there will soon be another lender in the stated income loan game… and then another. And another. Until they become a “regular” program again.

Let’s just hope they figure out a way to keep the waitress who makes $2.13/hour plus tips from claiming that she makes $130,000/year as she buys a $415,000 house.

Consumers are on alert when they talk with mortgage loan officers more than I have seen in recent years. All over the news, people are being bombarded with stories about how people are being foreclosed on all because some unethical mortgage loan officer put them in a bad loan and now they can’t afford their payments.

And in some strange way of thinking, people seem to gravitate toward the bigger lenders thinking that there is no way that anyone from would be able to do something that would be considered bad.

Wrong.

Heck, I see it happen all the time. As recently as yesterday. The simple case highlights:

Lady came to me wanting a mortgage and I quoted her a 5.125% rate.

She said that Wells Fargo quoted her a 4.875% rate and so she decided that we were too high and trying to “rip her off”.

Realtor just emailed me this exact email:
You will be happy to know who decided to go with Wells because their 4.875 was better than your 5.125 just closed… 5.25 (DOH)

So they promised a 4.875% and she ended up getting a 5.25% rate – worse than the actual 5.125% that I could have delivered?

Yes.

I see it all the time. At least once a week. Someone promising something they can’t deliver.

I wonder how she feels about Wells Fargo now?

That’s actually the punchline.

Sorry. Tough room.

But seriously, folks, I don’t mean to make light of what is a very, very unfortunate situation. What “situation,” you ask?

Ah, well. Goldman-Sachs, the venerated Wall Street investment firm, has gotten itself into a bit of hot water with the SEC. And the Justice Department. And pretty much every American taxpayer. There are probably some other folks who’re more than a bit upset with them, but you get the idea.

What’d they do?

Well, for starters, it would seem that they weren’t exactly … honest. Allegedly. In a lawsuit brought against Goldman-Sachs by the U.S. Securities & Exchange Commission in mid-April, it is alleged that they conspired with a hedge fund operator — John Paulson — to put together a lineup of mortgage investments that were almost sure to fail. The investment pool, which they named “Abacus,” was the Bad News Bears (or the Chicago Cubs, if you will) of mortgage securities.

Mr. Paulson was happy to invest $1 billion (yes, that’s one billion dollars) from his hedge fund in the project. You know, just to be helpful.

Once this pool of bottom-feeding investments had been assembled, as it is alleged in the lawsuit, Goldman-Sachs took the investments to other firms, such as the Royal Bank of Scotland, PLC and IDK Deutsche Industriebank AG, and sold it to them. It’s also alleged that they might not have disclosed the outlook of the securities nor about Paulson’s involvement.

Naughty, naughty.

At then end of the day, investors in the deal lost more than a billion dollars. Mr. Paulson made over a billion because he had inside information and was able to sell his shares short. In other words, before they totally tanked.

Needless to say, those other investors are pretty ticked off. To say the least.

On May 4, the U.S Justice Department filed criminal charges against Goldman-Sachs (based allegedly — I keep using that word … I wonder why — on a tip from the SEC).

The crux of the case against the investment firm is whether they misrepresented themselves. As the charges were only brought today, and since I’m not directly involved, I can’t indict them, as I haven’t seen the evidence. That’s the Justice Department’s job.

What I do know is that all of this tomfoolery isn’t going to do anything to elevate the image of the financial sector in the minds of the American public. To say that it’s going to draw their ire is a major league understatement.

So, what does this mean for us? What does this mean for the everyday American?

It’s hard to say, but it’s for darned sure going to mean increased scrutiny on the financial industry. I’m hopeful that it’s going to lead to some serious discussions about reform. Discussions about real regulation. Discussions about big players like this taking responsibility for their (alleged) actions.

There’s one thing that I am sure of, however, and it’s that there’ll be no shortage of Goldman-Sachs jokes in the near future.