The issue a lender will have is suppose at some point in the future, housing prices decrease and you lose some equity. Therefore your home is not worth what the appraised price was at the time you took out the HELOC or loan. A lender expects you to continue paying the loan and if you don't provide proof of income or tax returns, how will the lender know you have the income to pay the loan back.
After the recession in 2007 - 2010, lenders want proof and a guarantee that you have the ability to pay the loan on time every month. Therefore you need to provide proof of income or tax returns to satisfy that guarantee.... more