Mortgage Update

Features & Benefits of Portfolio Loans

Paul Luykx (LX Financial LLC) — Fri, 27 Jan 2012 18:56:43 -0500

Portfolio loans can be a powerful alternative to many common lending restrictions of the mainstream - Fannie Mae, Freddie Mac, FHA type programs. Because portfolio loans are retained by the lender and are not sold in the secondary market, lenders make their own, common-sense rules, specifically to offer alternate solutions. Below are the highlights. /// In the next issue, a summary of the stipulations for converting a property from owner-occupied to non-owner occupied. /// Comments, questions, service? Contact me. – Paul Luykx, Mortgage Banker (What's a Mortgage Banker?)

Portfolio loan features/benefits
The list below is incomplete because a portfolio loan can be "a fit" in so many unique circumstances. As you read through it you can probably think of a few of your own situations yourself. In addition, because the documentation and verification standards are different, sometimes a portfolio loan is a solution just because the paperwork, or circumstances are not a fit for another type loan. (The documentation requirements for condos for example is a lot lighter).

No Mortgage Insurance to 90% LTV
Jumbo loans to $5,000,000
HELOCs to 85% LTV. Great for REO investors with "free and clear" homes
2nd fixed rate mortgages to 85% LTV
620 min. Fico
50% max. Debt To Income (DTI)
One month (rolling) mortgage late allowed
Vacation homes to 80% LTV
3-4 Family Owner Occupied to 80% LTV
1-4 family investment to 80% LTV
Condominiums with <40% rental units
No rate add for acreage
No rate add for any loan <$1,000,000
No rate add for cash-outs
No rate add for condo, manufactured/modular homes
No rate add for escrow/impound waiver
No rate add for rural properties

Any questions?
Contact me

Mortgage decisioning criteria, and why you care!

Paul Luykx (LX Financial LLC) — Wed, 25 Jan 2012 14:01:04 -0500

Program Rules - Lender Rules- Underwriting - are the 3 levels of lending criteria that culminate into a loan approval. Mortgage financing is a key element of the purchase process, so it pays to understand the process. A synopsis below.... /// In the next issue, a summary of the current benefits of portfolio loans. /// Comments, questions, service? Contact me. – Paul Luykx, Mortgage Banker (What's a Mortgage Banker?)

Program rules
All mainstream mortgages are subject to universal program rules. If lenders do not follow these rules they will not be able to sell the mortgages (which virtually all are), OR WORSE - lenders will be obliged to buy loans back at a later stage. It is the fear of buybacks that drives the current over the top scrunity. Buyback processes can be huge! and are virtually always initiated for non-performing loans (we've seen a few of those as of late I think) - so there is a risk that a lender has to buy back all non-performing loans ever originated if it does not strictly adhere to the program rules. Imagine the fear this instills into the business environments at mortgage lenders nowadays!
You can find all program rules (FHA, Fannie Mae, Freddie Mac, USDA, VA) at my Information Center.

Lender rules: "Overlays"
In addition to the program rules referenced above, all lenders have their own, unique underwriting criteria, usually called "overlays". Lender overlays are mandated by the risk tolerance of the lender, or the investors who buy the lender's mortgages. Overlays are what makes one lender different from another. As an outsider you will never know what the forever changing details/differences are, which is why you need the support of a knowledgable mortgage specialist - and here is why you are best of dealing with a mortgage banker.

Underwriting
Underwriters are charged - and burdened! - with making loan decisions in the highly charged, risk adverse environment I described above. Now more than ever they need perfected loan applications, in full compliance with often changing rules, and then some! They appreciate additonal details, documentation, narratives, notes, etc. Underwriters really want to approve loans, but we need to give them the tools and comfort to do so! This is why borrowers need to be encouraged to volunteer information, and deliver complete documentation (and more of it, rather than less), quickly.
Note that Underwriters do not "have to" approve any loan. It's rare, but it is possible to be declined - even if everything fits. Conversely, underwriter discretion can work in the borrower's favor as well where a loan gets approved that would in most other cases be declined. Here again is why you need to work with a mortgage expert, skilled in loan advocacy and matching presentation techniques to make sure loans get approved.

Mortgage lender, banker, broker: Big differences, and why you care!

Paul Luykx (LX Financial LLC) — Mon, 23 Jan 2012 16:55:49 -0500

There are important practical differences between a Mortgage Lender, Mortgage Banker, and a Mortgage Broker. Mortgage financing is a key element of the purchase process, so it pays to understand the options. It is particularly good to understand the mortgage banking concept, which allows you to in effect make full application to many lenders all at once - very advantageous in today’s mortgage environment! /// Next week a synopsis of loan decisioning, also useful to know, and the week following a summary of the current benefits of portfolio loans. /// Comments, questions, service? Contact me. – Paul Luykx, Mortgage Banker

What they are
>>Mortgage Lenders are usually depository institutions (banks, credit unions). They have a single line of products and unique lending criteria. All mortgages are sold in the secondary market (mostly Fannie Mae, Freddie Mac).
>>Mortgage Bankers use their own money to fund mortgages. They sell the mortgages either to Mortgage Lenders, or the secondary market. They offer a broad range of loan products and have the flexibility of matching an application with the lending criteria of an investor to whom they sell loans. Mortgage banking is now the hottest business model in mortgage financing because you are in effect applying to many lenders, all at once!
>>Mortgage Brokers are intermediaries who brings mortgage borrowers and mortgage lenders together, but do not use their own funds to originate mortgages.

What they have in common
>>Pricing: Lenders need to pay for all loan originations
somehow, whether they pay their own sales force, their own branch network, bankers, or brokers. At the end of the day rates and fees are therefore pretty similar.
>>Equal pricing: Commissions no longer depend on the rate charged so the focus is now always on getting the approval on the best possible terms – lender, banker, or broker.
>>All loans are sold in the secondary market, portfolio loans excepted.

The differences
The practical differences between a lender, banker, and broker, are the breadth of loan programs offered, expertise, and loan decisioning:
>>Mortgage lenders are limited to their own mortgage products and lending criteria. If your application is handled by an application-taker instead of a capable mortgage specialist, you are at risks of delays, or denials.
>>Mortgage Bankers (like me) have expertise, a broad product offering, and the flexibility of matching and approving applications with the criteria of one of their many investors. You are in effect applying to multiple lenders at the same time!
>>Mortgage Brokers have expertise and choice of lender, but do not approve loans. If a lender declines a loan it needs to be submitted elsewhere.

Do Fix & Flips with our money - or your money...

Paul Luykx (LX Financial LLC) — Sun, 15 Jan 2012 12:42:20 -0500

We are still faced with the best real estate opportunities of a lifetime. As sad as it is to say, the economic malaise continues to serve us very well. My investment group is interested in funding

highly profitable (fix and) flip projects - up to 100% of hard cost.

INVESTMENT CRITERIA

Our investment criteria are as follows:

1-4 family properties only. (2,3,4-family preferred)
Preferred investment size: $20K-$100K ($200K max)
NJ, NY only
ARV (After Repair Value) of at least 150% of hard (purchase and rehab) cost
Cross-collaterization on other properties considered.

If you are interested in:

Fix & Flip project funding, go here for Information and/or a Quick Quote
Investing with us, go here for Information

Rate projections from the Fed - Pay points? - John Sr & John Jr...

Paul Luykx (LX Financial LLC) — Fri, 13 Jan 2012 15:55:36 -0500

Fed will publish short-term rate projections
The Federal Reserve will now tell the public its expectations for short-term interest rates, starting after its Jan. 24-25 meeting. I find this odd, and here is why...

>>Reliability. If market realities change, the Fed may need to adjust rates. That is the Fed's job first and foremost.

>>Conflict of interest because the Fed may not want to contradict itself, and hesitate to take needed actions that conflict with its own projections.

>>Confusion. This pertains to short term rates, NOT (long-term) mortgage rates. People are constantly confused about this. Mortgage rates are primarily determined by capital markets. I am also concerned consumers will opt for ARMs as a result, rather then long-term security of fixed rate loans.

>>Independence. To my mind the Fed needs to be independent, and anything that takes away from it is a slippery slope, that can ultimately affect confidence in US monetary policy.

Pay points?
If you plan on owning a property for longer than 4 years and want the comfort of a 30-year rate fix, you may want to consider buying down the rate (pay discount points). A rule of thumb is that a 1.00% "discount fee" or "buydown", results in a 0.25% reduction of the note rate on a 30-year fixed rate loan. (Your payback period is about 4 years). And over the life of the loan you will save about 4% of the original loan amount. More information
Pay 1.00%, 4 year payback, save 4% of the loan amount: 1-4-4.

John Sr and John Jr...
I am not here to tell you not to give your kids your first name, but know this: You are at risk of credit report mixups, and correcting it may take time and money, especially if derogatory items are involved. Applications may be declined, delayed, or not approved on best possible terms. I have have come across a few nasty situations lately, and I thought I'd share it with you. Oh.... same first name and different middle initial is not an alternative. - P

Contact me

Financing REO projects in 2012

Paul Luykx (LX Financial LLC) — Thu, 05 Jan 2012 20:53:59 -0500

We are still faced with the best real estate opportunities of a lifetime - and amazingly there are even getting better! As sad as it is to say, the economic malaise continues to serve us very well.

FOCUS ON RENTAL VIABILITY

Because resale markets remained weak (and rental markets strong) during 2011, we started assisting developers with refinances to convert rehabbed properties to rental properties rather than wait for the re-sale. This way we were paid back, and developers could cash out and move on to the next project. Long-term rental viability is therefore now more important than resale value - which is why we prefer 2,3,4-family properties.

INVESTMENT CRITERIA

As of now our investment criteria are as follows:

1-4 family properties only. (2,3,4-family preferred)
Preferred investment size: $20K-$100K ($200K max)
NJ, NY only
ARV (After Repair Value) of at least 150% of total hard cost
Cross-collaterization on other properties considered.

INFORMATION

For investment information go to www.lxfinancial.com

Go here for construction/rehab loan information

To request a quick quote for a project go to www.fixflipnow.com

My best wishes to you for 2012. May it be a fulfilling and prosperous year!

We're open for business :)

Market assessment - Rate influencers - Closing costs - Year-end tax pointers

Paul Luykx (LX Financial LLC) — Fri, 16 Dec 2011 14:07:10 -0500

As the year draws to a close, time to do a little market assessment....

It's a buyer's market, for homes and investment.
Short sale and REO values are low due to market weakness and over-supply.
REO rehab values are even weaker due to lack of mortgage programs to finance them. (Ever wondered why the lender doesn't just provide the loan?)
Rental markets are strong. (I prefer 2,3,4 unit investment). More info.
Mortgage financing is (an inceasingly more) fickle business. Thorough prequalification is key. Here is a form you can use to get a PQ from me.
Credit improvement is even more fickle, and also becoming more complicated. Self-help often has the opposite effect. More info.

Closing costs where you are
Bankrate.com performs an annual closing cost survey. To see what they are in your location, go here.

How many rate influencers can you name?
I get the "what's your rate" question all the time. I think we all know it is a simple question, and a good answer is not. So how many rate influencers can you name? Go here for the incomplete list. If you can think of any I should add, let me know!

Ask a CPA: Year-end tax pointers

Ryan Curran is a "hands-on" CPA, specializing in tax matters pertaining to real estate: Sales, development, construction. There are many things you can do to reduce your 2011 tax exposure. Here a few:
1. Prepay real estate taxes or mortgage interest
2. Sell underperforming stocks or bonds to create a loss
3. If you own a business, deposit checks in the new year
Ryan invites any question or inquiry. Contact him.

Finance REO investments
I do not sell or offer properties for sale. Developers/investors present me properties to finance/invest in. I have a constant stream of investment opportunities with annualized return ranging say 10% to 50%+. Minimum investment $10,000. Go here to add yourself to the mailing list.

"A public opinion poll is
no substitute for thought".
- Warren Buffett

Contact me

You can have >1 FHA loan - Mortgages after foreclosure, short sale - New REO inv company

Paul Luykx (LX Financial LLC) — Sat, 03 Dec 2011 16:11:26 -0500

Developers present me with REO projects on a daily basis. They need financing and investor capital. I am starting a new company dedicated to highly profitable, short-term, REO investments. If you are interested in being part of this as a (founding) shareholder, let me know. /// This week a quick review of mortgages after deed in lieu, foreclosure, or pre-foreclosure (short) sale. See below, or go to my website. - Paul :)

Can you have more than 1 FHA loan?
Yes, under the following cirumstances:

Relocation. Must document unreasonable commute distance from current home.
Increase in family size. Must have current mortgage balance at or below 75% LTV.
Vacating jointly owned property. Example: divorce.
Non-occupying co-borrower. Co-signed with family on their home

Mortgages after deed in lieu, foreclosure, or pre-foreclosure (short) sale
The waiting period for FHA is 36 months, and for Conventional 24-84 months - depending on LTV.

For further details go here

Finance REO investments
I have a constant stream of investment opportunities with annualized return ranging say 10% to 50%+. Minimum investment $10,000. Go here to add yourself to the mailing list.

Contact me

Loan Level Price Adjustments: You'll want to know this.

Paul Luykx (LX Financial LLC) — Wed, 16 Nov 2011 21:16:28 -0500

I first wrote about this in February. It significantly raises the rate in certain circumstances, like (a combination of) cash-outs, investment property, low credit score, high LTV. I have recently priced loans where the rates came in at close to 6.00%! - P

What are LLPAs?
In 2007, Fannie Mae introduced "Loan Level Pricing Adjustments" (LLPAs). The concept is basic: For loans with higher risk profiles, there are additional up-front charges to offset potential long-term losses. LLPAs went up April 1st, 2011. Whether paid by the borrower upfront, or factored into a higher rate, it can drastically increase the cost of borrowing. As you read this, just remember this rule of thumb: A 1.00% additional LLPA charge on a 30-year fixed translates into an approximate 0.250% rate increase.

Most common LLPAs

1. Adverse Markets (FHA, VA, USDA loans also)

2. LTV/credit score.

3. Special features:

High-LTV
Interest-Only (IO)
Investment Property
Multiple-Unit Properties
ARM
Manufactured Home
Cash-Out Refinance
Energy Improvement Feature
40-year Term (MBS only)
Condominiums and Cooperatives
High-Balance Mortgage Loans

Details: LLPA matrix
You will find the full LLPA matrix here. Note that LLPAs are cumulative. Multiple adjustment may apply. Again, a rule of thumb is that a 1.00% charge represents an approximate rate increase of 0.250% on a 30-year fixed.

REO financing - Lending criteria - Mortgages after bankruptcy

Paul Luykx (LX Financial LLC) — Mon, 14 Nov 2011 12:43:24 -0500

All the money is being made in REOs at the moment. Lower risk than securities, and great cash on cash returns. You can buy them, or finance them at <50% loan to value. To add yourself to the mailing list for opportunities go here. /// This week a quick review of mortgages after bankruptcy. In short, the waiting period for FHA is 24 months, and for Conventional 48 months. See below. Next week: Waiting periods following foreclosure, short sale, or modification. /// Rates are still near record lows, but underwriting criteria are becoming tougher: Higher Fico requirements and rental revenue exclusions from qualifying income when buying 1-4 unit properties! /// Make it a good week folks. - Paul :)

From Fix&Flip to Fix&Hold
(Fix and) flips, are a challenge because markets remain weak and it takes longer to re-sell properties. Time=Money. I recommend a hold strategy as revenue property to avoid market risk, and ultimately optimize return on investment.
2, 3, 4 unit properties with rental revenue that support a bank refinance for a permanent loan work best, so you can still cash out. Planning for long-term hold still does not prevent a quick sale. To review a summary of construction/rehab financing options, go here. Planning is key. Contact me early.

Mortgages after bankruptcy
The most common types of personal bankruptcy are:
1. Chapter 7 ("liquidation"). Details
2. Chapter 13 ("payment plan"). Details

An elapsed period of less than two years, but not less than 12 months, may be acceptable for an FHA-insured mortgage, if the borrower can show that the bankruptcy was caused by extenuating circumstances.

For further details go here

Finance REO investments
I have a constant stream of investment opportunities with annualized return ranging say 10% to 50%+. Minimum investment $10,000. Go here to add yourself to the mailing list.

Contact me

Mortgage InfoCenter - Request streamline eval - Financing 5+ properties, Investment mailing list

Paul Luykx (LX Financial LLC) — Mon, 07 Nov 2011 10:29:18 -0500

I am amazed at the detailed questions I get nowadays from Realtors, borrowers, and others. It prompted me to convert my website to a Mortgage Information Center for peeps who want to know more. It includes a detailed Mortgage Summary (stuff you'll want to reach at least once if you are a Realtor), complete FHA/Fannie Mae underwriting guidelines, 203K presentation, and more. Check it out. If you have any recommendations for making it better, please let me know. /// As the stock markets go up and down, so do interest rates. Surpringly, rates have not increased as much as one would expect. The US Dollar remains the preferred currency. Read. /// Make it a good week folks. - Paul :)

FHA streamline refinance
This refinancing option is considered streamlined because it allows you to reduce the interest rate on your current home loan quickly without an appraisal and without having to qualify for the loan again. The loan must be in good standing and the refinance must lower your monthly payments. There are no cash-out options, but the closing costs may be added to the loan. Any FHA loan with a rate of 4.50%+ should be evaluated for viability. You can make an online request for review here.

How many properties can you finance?
The answer is: Ten, 1-4 unit properties. (Other type properties are not included). The reserves and credit score requirements go up, and maximum loan to values come down with properties 5-10.

Reserves
When the borrower will own 1-4 financed properties (including the subject property) the reserve requirements are:

- 2 months on the subject if it is a second home,
- 6 months on the subject if it is an investment, and
- 2 months on each other financed 2nd home or investment.

When the borrower will own 5-10 financed properties (including the subject property) the reserve requirements are:

- 2 months on the subject if it is a second home,
- 6 months on the subject if it is an investment, and
- 6 months on each other financed 2nd home or investment.

Fico and LTV

For full details go here.

Fix & Flip investment list
I have a constant stream of investment opportunities with annualized return ranging say 10% to 50%+. To add yourself to the mailing list, subscribe here.

Contact me

____________________________

"Think not those faithful who praise all thy words and actions,
but those who kindly reprove thy faults"
Socrates

Construction/Rehab loan options

Paul Luykx (LX Financial LLC) — Fri, 28 Oct 2011 17:16:42 -0400

As promised, here is a summary of current construction/rehab loan options. The 203K is the only mainstream program. The others are not, which means that there is limited availability and the terms are somewhat higher than they would otherwise be. The good thing is that you are dealing with portfolio lenders who set their own standards, and the conditions and loan pricing (rate and fees) are more flexible. - Paul :)

FHA 203K
A rehab to permanent FHA loan

Owner-occupied only, 1-4 unit properties.
Rehab only, BUT what makes it a rehab is when the existing foundation is used, so sometimes it can work for construction also.
Rate: Market FHA rate + 0.50% approximately

BORROWER / BUILDER LOAN
(Borrower who hires a builder)

1-4 family units, residence or investment property
Construction or rehab
LTV to 80%, to 90% with cross-collaterization
Land purchase up to 75% of the lot purchase price
12-18 month term
Available for less than perfect credit
Interest only payments based on funds advanced
Rate: 5%+, 3%+ fees

SELF-BUILD LOAN
(Borrower acts as own general contractor)
See Borrower/Builder Loan above.

BUILDER / SOLD LOAN
(Builder has a contract to sell the completed home)

1-4 family units (up to 12-units on exception basis)
Construction or rehab
LTV to 70%, to 75% with cross-collaterization (SFD only)
Land purchase up to 75% of the lot purchase price
12-18 month term
Available for less than perfect credit
Available for builders with limited experience
Rate: 5%+, 3%+ fees

BUILDER SPEC LOAN
(Construction of a model or spec home)

1-4 family units (up to 12-units on exception basis)
LTV to 50%
Land purchase may be included in the loan
12-18 month term
Interest only payments based on funds advanced
Rate: 7%+, 4%+ fees

FIX AND FLIP LOAN
(Spec purchase and rehab)

1-4 family units
Up to 100% of cost
6-12 month term
Rate: 12%+, 9%+ fees

Do you have a scenario? Ask me!

____________________________

""We need to learn to set our course by the stars,
not by the light of every passing ship"

Omar N. Bradley

Stock market up, rates up - Constr loans - PMI or FHA? - Rate credits

Paul Luykx (LX Financial LLC) — Fri, 28 Oct 2011 17:11:34 -0400

OK, stock markets up - and upward pressure on rates because bonds compete with stocks for investment money. Maybe also renewed confidence in real estate - we'll see. As of now: Lock ASAP! - Paul

PMI or FHA?
Conventional rates are about 0.50% higher. The cost is about the same. FHA is easier to qualify for, you must have it for 5 years (PMI=2 years), and you can refinance without income qualification and without appraisal.

No lender fees - what does that mean?
No application, processing, underwriting, commitment, tax service fees: None. And if you are a firefighter, police officer, teacher, medical worker, or municipal employee you get the money for the appraisal refunded on close!

Construction/Rehab loans
A few options are starting to appear. I will dedicate the next newsletter to it.

Don't forget: Rate credits
It's the opposite of a discount. A rate credit can be helpful to do a refinance without paying cash for the closing costs, or a purchase situation where cash is tight. Below is an example (not a quote) of a $100,000 mortgage. By opting for a 4.75% rate the borrower receives a rate credit of $1,002 on close (and to get a 4.25% rate, the borrower would pay a discount fee of $847).

Closing cost study - Refinancing fix&flips - Did you know?

Paul Luykx (LX Financial LLC) — Fri, 07 Oct 2011 15:41:54 -0400

Which state has the highest closing costs? The new Bankrate Closing Cost Study is out. Before you go there, please bear in mind that AFR mortgage ("a direct lender with a wholesale attitude") charges NO lender fees!, No kidding!

Go to the closing cost study. /// Rates continue to be rock bottom. I see no upward pressure at the moment, thanks to Euro troubles and policy makers. (Hey, inflation may ultimately lead to a bump in real estate prices). Make it a good week folks! - Paul

Refinancing fix & flip properties
Prolonged periods can erode profits. Many investors opt to refinance. Better to rent the units and bank-refinance now, convert equity to cash, and move on to the next project. Re-sell later if desired. Sometimes easier said then done because unique lending rules apply. Contact me if you have a situation. 1-4 unit properties only.

Solutions for cash tight situations
1. 18 ways to generate (more) down payment. Read
2. Seller concessions. Read
3. Rate credit. Read
4. More financing. Contact me

Did you know?
Seller concessions can be used for much more than just “closing costs” 12 months hazard insurance, upfront insurance premium, loan discount, and more. Info

Contact me

____________________________

"DIPLOMACY is the art of letting
someone have it your way"

Rates at all time low - FHA loan limits - Flip investment/financing

Paul Luykx (LX Financial LLC) — Fri, 05 Aug 2011 13:59:04 -0400

I have been advocating mortgage-secured fix and flip investment and financing for over a year. I submit that with unstable stock markets and real estate markets the concept is soundly validated. It is a low risk/high yield way to invest - and to get highly profitable fix and flips done. My investors and are first mortgage-secured at less than 60% LTV with 20%+ returns on investment. Not a single project is in trouble, and the developers are making their profits. Read up and/or watch the "Smart Fix and Flip Investing" video (Registration needed). - Paul

Bad news, or good news?
Check out the recent bad news. It’s worse than it sounds. The S&P/Case-Shiller report posted declines in both its 20-city composite and its 10-city index, which declined 3.6% year-over-year. AND ALSO: home prices ticked higher for the second consecutive month following an eight-month slide. Read article.

Reminder: FHA loan limits to decline.
FHA loan limits will likely decline in 669 of the 3,334 counties that are eligible for FHA insurance, effective October 1, 2011. Read and check your location.

Rates at all time low
Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac: "Treasury bond yields fell markedly after signs the economy was weaker than what markets had previously thought - and on a on a positive note, there were indications that the housing market is firming. Real residential fixed investments added growth to the economy in the second quarter after subtracting from growth over the first three months of the year". Read up

Contact me

____________________________

"Change your thoughts, and you can change the world"
Norman Vincent Peale

Market indicators! - FHA limits - Fix-Flip opp - Secrets to getting a mtg

Paul Luykx (LX Financial LLC) — Sat, 09 Jul 2011 19:16:52 -0400

Time to jump in, if you have not already? I see many investments with great cash-on-cash returns (there's one below). Good deals are still to be had, but rock bottom buying opportunities are dwindling, low rates, strong rental market, and now also an uptick in sales. The timing is right I think - P

Real estate stocks benefit from renewed interest
FORBES: Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Dow Jones U.S. Real Estate Index Fund (IYR) where we have detected an approximate $185.3 million dollar inflow - that's a 5.0% increase week over week in outstanding units (from 59,750,000 to 62,750,000). For a complete list of holdings, visit the IYR Holdings page. Read

Reminder: FHA loan limits to decline.
FHA loan limits will likely decline in 669 of the 3,334 counties that are eligible for FHA insurance, effective October 1, 2011. Read and check your location.

Secrets to getting a mortgage
At a recent press conference, Federal Reserve Chairman Ben Bernanke said lending standards for mortgages have tightened so considerably that "the bottom third of people who might have qualified for a prime mortgage in terms of, say, FICO scores a few years ago -- cannot qualify today." Can you afford to deal with anybody other than a seasoned mortgage professional?

Mortgage-secured fix and flip: 22% profit share,
plus 12% interest. Minimum investment: $10,000. Check the investment summary.

Contact me

____________________________

"Change your thoughts, and you can change the world"
Norman Vincent Peale

Mortgage-secured fix-flip investment: 22% profit share and 12% interest

Paul Luykx (LX Financial LLC) — Fri, 08 Jul 2011 17:14:14 -0400

Here is a current investment summary. As always, a quick response is needed. Please let me know if interested:

Mortgage-secured fix-flip investment.
Purchase and renovation of 3-family property. Location: NJ 07111
Estimated project time: 4 months
Funding requirement is for $80,000, or 39% of After Repair Value (ARV)
Investor projected return: 22% profit share, plus 12% interest: $21,500 total.
Minimum participation: $10,000.00

Go here to download the Investment Summary

Go here to review the "Smart Fix-Flip Investing" information.

Regards,

-Paul
___________________
Paul Luykx
LX Financial LLC
Ph: 201-918-5443
Ph: 800-405-0676
Fx: 866-839-1337
pluykx@lxfinancial.com
http://www.lxfinancial.com/

Buyers bypass the traditional mortgage process

Paul Luykx (LX Financial LLC) — Tue, 28 Jun 2011 09:19:14 -0400

Keep your eyes on alternate financing options. There is now a clear trend. Two types to keep your eyes on: Portfolio loans, and mortgage-secured investment (investors who will provide financing and get interest PLUS profit share, mostly for fix and flips). - Paul

Buyers bypass the traditional mortgage process
Fannie Mae chief economist Doug Duncan believes cash purchases of homes will continue at "quite high levels" for the rest of this year as investors and even some homebuyers bypass the traditional mortgage process. Read.

Mortgage-secured investments
The trick is buying for a good price AND being able to sell at a below market price AND being able AND have a solid cash flow that will pay the investor mortgage in the event that neither a resale or refinance is possible right away. More information.

Portfolio anyone?
Even the big banks are rumored to get into the protfolio arena. Not surprising, and more on this soon! Here are some of the opportunities portfolio loans provide now:

Fixed rate, interest only, ARMs, HELOCs, Jumbos
Up to 90% LTV without mortgage insurance
Up to $900K loan amount. (No conforming limits)
No minimum reserves required up to $900K
Up to 50% DTI
Stated income, limited, and no verification loans
Loans to non-resident foreigners
Primary wage earner credit score used to qualify
Loans to trusts, partnerships and LLC's
HVCC does not apply. I order the appraisal (Most cases)
Non-warrantable condos. (Limitations still apply)
40% investor concentration allowed on condos
HELOCs to 85% with credit card and checkbook
First position HELOCs
No rate adjustments on cash-out
Foreclosures and short sales allowed
Rural properties and acreage
Manufactured home loans to $200,000 (80% LTV max)
Refinancing of construction loans to permanent
1st and 2nds on vacation, second homes to 80%LTV
Pledged securities in support of mortgage loan

_________________________________

"Be thine own palace, or the world's thy jail"

John Donne

FHA, Conv, Portfolio (No PMI) comparison - HomePath incentives extended

Paul Luykx (LX Financial LLC) — Tue, 14 Jun 2011 18:47:16 -0400

FHA, Conventional, or Portfolio? Today I worked out the options for someone, and I thought I'd share it with you. With the increased cost MI, porfolio can make sense! (See below). /// Portfolio loans are now also available for investment, 1-4 unit properties. Great! /// HomePath is extending buyer incentives (See below). - Paul

FHA, Conventional, or Portfolio?

HomePath buyer incentives extended
- Initial offers must be submitted on/after June 14.
- Primary residences only
- Sale must close by October 31
- $1,200 bonus available for selling agents
- http://www.homepath.com/

_________________________________

"Act as if what you do makes a difference"

William James

This market's for you! - Self-directed IRAs

Paul Luykx (LX Financial LLC) — Sat, 11 Jun 2011 15:00:18 -0400

This market's for you! Low prices, low interest rates, great cash on cash returns - whether home-buyer or investor, this market's for you! What's holding us back is groupthink ("it's a bad market, and we all agree on this"), and fear to think outside the box. I provide mortgage financing, and make/manage fix and flip investments. Whether you are a realtor, buyer, investor, or developer, I'm here to assist! /// I believe that where markets are heading should have little to do with investment decisions at this point, but if you're in to prognosticating you may want to read this for a few opinions. - Paul

If I had a million dollars...
If I had a million dollars.... (turn the sound up)
What would I do? Buy a house? In this market? Well - yes.
What if you can buy at a 30-40% discount?
What if you can invest with protection against a 30-40% value drop?
What if I can invest without actually having to buy the property?
Tell me where I have this wrong, but well-managed, mortgage-secured fix and flip investments is where it's at. Check it out.

Take charge of your IRA
You can use your IRA funds by setting up a self-directed IRA to invest in real estate, private equity and even you own businesses. Read.
I have more research materials on this. Let me know if you want it.

_________________________________

"Hindsight is always twenty-twenty"

Billy Wilder

FHA limits to decline - Don't worry, be wealthy - New finance options - Market fundamentals

Paul Luykx (LX Financial LLC) — Sun, 05 Jun 2011 09:42:34 -0400

There are two types of financing to keep an eye on: Portfolio loans that offer unique, common sense lending criteria. (Last week I told you about pledged asset loans and no PMI, both to 90% LTV). There are many developments on the horizon that may have a drastic, positive impact. Stay tuned. The second type is mortgage-backed investment, cash investors basically who are willing to finance someone else's investment in return for a share of the profit. Currently used primarily for fix-flips, I see broader application. I'll keep you posted. - Paul

FHA loan limits to decline.
FHA loan limits will likely decline in 669 of the 3,334 counties or county equivalents that are eligible for FHA insurance, effectiveOctober 1, 2011. Read up and check your location.

Markets down, but fundamentals solid
I am buying. Markets may be down, but the fundamentals are solid - a great time for those who have the means and chutzpah to move forward. I see low price levels resulting in solid cash flows, and well-executed fix-flips with excellent cash on cash returns. Contact me with your scenarios so we can evaluate the financing opportunities and implications.

Don't worry - be wealthy
Author Steve Siebold: "This is the easiest time to become a millionaire in America than I have ever seen by far and I think the wealthy see that an that is why they are getting wealthier," he tells Aaron in the interview above. "But, on the other side, anyone has the chance to become a millionaire in America, more right now than ever before." See interview. I recommend you follow both links - P.

Contact me

_________________________________

"Enthusiasm moves the world"
Arthur Balfour

Stated loan cutbacks - Pledged asset loans - Debt investors - No PMI to 90%LTV - Helocs

Paul Luykx (LX Financial LLC) — Sun, 29 May 2011 09:11:43 -0400

The pendulum is still swinging towards more irrational, over-the-top caution. The absence, or lack of application of lending rules that caused the problems, have been replaced by excessive rules and procedural changes that limit the recovery of real estate. The constructive efforts of the legislators and regulators are erratic at best. I see a new future for portfolio loans that bypass Fannie Mae/Freddy Mac, FHA lending rules altogether, and offer more common sense lending criteria. Some good and bad news below. - Pau

Stated loan cutbacks
Regulators are putting the squeeze on no-income/asset-check loans, also known as "liar loans". Stated income and no document loan programs have been dealt severe blows, resulting this month in cancellation of lending programs, and significant restrictions for all others. Self-employed people often cannot document their income in a traditional manner, and with intelligent lending criteria there is a legitimate place for these type of loans. To label self-employed in need of this type of loan in effect as "liars" is of course not right - and ultimately a reflection of the inabilities of those who are empowered to develop proper standards. Contact me if you have a scenario. Go here to read up on the history of stated loans

No construction, rehab loans
How is this possible? There are no mainstream financing programs available for construction and rehab (203K excepted). There are unique options available, so do contact me with your scenarios.

Debt investors
The absence of construction and rehab loans is good and bad. Good because liquidation prices of rehab REOs are further depressed as a result, so there are good fix-flip profits to be made. It is bad because you need to pay cash. Enter the debt investor to supply the funding otherwise provided by a mortgage. To see how you can finance or sell a rehab with significant profit potential, request a scenario quote here.

Pledged asset loans
Good news! A unique new lending program:
- Up to 90% LTV (10% down needed) with asset pledge
- Any person may pledge assets on behalf of borrower
- Primary, second home, investment property allowed
- Pledged accounts may be considered for release after 36 months
- No loan limits of any kind

No PMI, and HELOCs
90% LTV fixed rate loans available to $800,000, no PMI.
1st and 2nd mortgage HELOCs to 85% LTV

Deb investment
Good news. You can invest in fix-flip projects without taking buying the property, get the security of a first mortgage, earn interest, AND get a profit share. (For example: $100,000 investment, $10,000 profit share, 8% interest. 6 month return: $14,400 or 14.4% (say 29% annualized). The minimum investment is $10,000. It does not matter what the property ultimately sells for, the debt investor has a set return and gets paid back first. If you are a:
- developer with a high profit fix-flip project, request a quote here.
- realtor selling a property with fix-flip potential, you can present it here
- realtor with buyers looking for opportunities, contact me
- an investor, go here for further information

_________________________________

"A man's character is his fate"
Heraclitus

For those who have the means to "press forward"

Paul Luykx (LX Financial LLC) — Sun, 22 May 2011 07:53:58 -0400

In 1843, my favorite magazine, The Economist, said we have "a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress"

This couldn't be more timely if it were written today - and about our real estate market. There are a lot of people who are paralyzed with fear when it comes to making real estate investments now, and that's reasonable. A standard real estate investment can be very risky right now with the instability of housing values.

But for those who have the means to "press forward" through this and look for ways to still make money in the real estate market - the safe fix-flip investment is far more secure than actual property ownership. (And it's a lot better than Vegas too!). So if you are looking to invest some of your hard earned money in a different type of real estate investment, now is the time.

We do "Smart Fix-Flip Investing" and we partner (invest) with you in every project!

It is a buyer's market: Our developers buy really low, and sell the fixed up property at or below market value
It is a rental market: Rents easily support a bank-refinance to pay our investment back if there is no sale
Either way, we make great returns - Quickly!

Here is a link to a presentation. Interested or not - you'll want to check it out!

Interested?

Regards,
-Paul

___________________

Paul Luykx
LX Financial LLC
Ph: 201-918-5443
Ph: 800-405-0676
Fx: 866-839-1337
pluykx@lxfinancial.com
http://www.lxfinancial.com/

Mortgage flip rules - Why qualifying income & 640 score are not enough

Paul Luykx (LX Financial LLC) — Sun, 15 May 2011 12:47:28 -0400

Mortgage flip rules do not need to nix any sales! Just make sure you verify the lender's rules and be prepared for some additional processing requirements. See below. /// Qualifying income and a 640 score are no longer enough. I actually think it's good news. See below. /// Make it a good week folks! - Paul

Mortgage rules for flips
Flipping rules apply when the seller acquired the property in the last 12 months. Double or concurrent closes are not allowed. The owner must be the seller. For a quick flip financing quote go here.

There are industry standards, and lenders add their own unique requirements. Verify the property qualifies with the buyer's lender before accepting an offer! (Additional appraisal, inspection, verification, documentation requirements always apply). Better yet, call me to make sure it all goes smoothly. There are too many preventable (late stage) declines out there

Flip rule at Prospect Mortgage
In practical terms we only have one(!) limiting rule: Conventional loan maximum qualifying property value: (Purchase price+30%)+cost of repairs.

640 score and qualifying income not enough
A 640 score and 2 years qualifying income by themselves are not enough. You now also need (documented) confirming, compensating, and enhancing elements. Some examples are listed below. I actually like this for two reasons:
1. It is ultimately a first a first step to more common sense lending.
2. I can enhance an applicant's profile with measurable impact!

- No payment shock (Significant increase in housing payments)
- Reserves
- Rental history without lates
- Savings rate
- Accounts with 5+ year history
- More than minimum down payment
- Installment debt without lates
- Mortgage debt without lates
- Credit card debt without lates
- Major (past) derogatories like repos, write-offs, collections, etc.
- Home buyer course
- Stability of employment
- Likely professional advancement
- No gifts
- Low debt to income ratio
- High credit score
- No bankruptcy, foreclosure, loan modification
- More than minimum down payment
- Additional income, not used as qualifying income

Contact me

_________________________________

"Anticipate the difficult by managing the easy"
Lao Tzu

Homepath reno loans - Credit refresher - Why REO rehabs are cheap, and tough to buy

Paul Luykx (LX Financial LLC) — Sat, 07 May 2011 21:55:17 -0400

We offer Homepath renovation loans. Prospect is a national Top 5 lender for FHA 203K loans and Homepath loans. We now also offer the Homepath renovation loan. See below. /// I am still waiting for the launch of a new construction/rehab program. Without it REO rehabs remain super cheap, and also tough to buy. See below. /// Contact me for expert service. I'm open for business! - Paul

Homepath renovation loan
Here are the highlights. Also note the current incentives offered.
* High LTV: 97% financing available for O/O SFR properties
* Loan amount is based on the as-completed value or purchase price
and improvements, whichever is less
* Renovation funds are included in the loan amount
* Variety of sources of funds for down payment
* No MI required

Credit refresher
Credit scoring and credit improvement is fickle business, and so much is riding on it. Professional credit service is inexpensive (as low as zero), and easily pays for itself. Many people do not get the best possible rate because their credit was not optimized. I recommend you send me your prospects for a free review. It's good business practice, and it gets the ball rolling too! Here are the current credit highlights:

* Minimum Fico is 580, 640 for good rates, 740 for best rates
* You need a good credit score AND a good credit profile (record)
* Your profile has current, short-term, and long-term items, which
* take 5-30 days, 30+ days, or 90+ days to improve/fix
* Credit improvement can take 5-180 days and consists of:

    1. Credit repair (if needed)
    2. Credit improvement (if needed)
    3. Short-term perfection
    4. Perfect credit habits (see box to the left), and coaching

Why rehab REOs are cheap, but tough to buy
REOs in need of rehab are cheap to buy because:

1. Poor market conditions: Prices are low.
2. Bank liquidation values are even further depressed because:
   a. There are no mainstream rehab/construction loans available for
        investors/developers; and
   b. Sellers insist on closing in 30 days when an offer is accepted, and
        it takes 60-90 days to close on a consumer rehab loan

To take advantage of this, my strategy as an investor is to be "the bank". See presentation (registration required). If you need a financing for a project go here.

A reversal for real estate after some mild gains
NYT: Prices for both homes and commercial real estate are falling again. Meaningful improvement may have to wait until there are many fewer distressed properties for sale. Read.

Contact me

_________________________________

"Action is the foundational key to all success"
Pablo Picasso