The IRS is Changing How Lenders Can Verify a No-Doc Loan

Lying about your income on a loan application is a crime. But before now, it was a lot harder for lenders to catch you.

When applying for a loan, you must normally provide the lender with copies of the last two income tax forms you filed with the IRS.

But for those borrowers who choose to use "stated income," or "no doc" loans, all you have to do is state what you make, and then sign on the dotted line.

No one verified your income while your loan was being underwritten. A tool that lenders use, IRS Form 4506-T, which is an income verification form, would be used to spot check loans that already closed.

But now the IRS is putting Form 4506-T online. It'll only take lenders 2 days to find out whether you actually earn the income you put on your no-doc loan application.

Borrowers, honesty is the best policy.

The Health Care Crisis – Incomes Are Up A Little, but Health Care Costs Are Up A Lot

There's a lot of talk about how incomes have been rising modestly. But what isn't talked about is rising health care costs have eaten up virtually every penny of our raises – leaving us feeling pinched when we use our same salary to pay for everything else we need in our lives.

Some folks are trying to keep their health care premium costs in check by raising their deductibles.

My cousin Gail says she and her husband pay $1,500 per month for their policy with a $1,500 per person deductible. After that, she's has an 80/20 split until she reaches $5,000. She's in her mid-50s, and as a former health insurance specialists, only sees this expense growing until she's old enough to qualify for Medicare.

Health care is already eating up a huge portion of our nation's GDP. When the Boomers start turning 65, they could put Medicare out of business as we know it.

Median Prices are Falling, But That Doesn't Mean Houses Aren't Selling

The numbers are in and they aren't pretty – median home prices were down in most regions of the country, with the median price in the Northeast going to $271,000 from $282,000 and the South to $184,000 from $189,000.

The median home price is the exact middle – the same number of homes priced above the median sold as below the median. When more lower priced homes are being sold, the median shifts downward in order to find the exact middle.

But just because the median price in my neighborhood fell nearly 18 percent doesn't mean lots of houses aren't selling.

It also doesn't mean is that homes in the south sold for $5,000 less than they were last year. And it doesn't mean homeowners aren't making money.

It's just that the balance has shifted once again, and more lower priced homes are selling than higher priced ones.

And that makes sellers pretty darned nervous.