What do I do with this Self-Employed Client?

I can feel their pain for sure! Being a self employed real estate agent with a self employed carpenter husband we are probably stuck in the house we are in until we could pay CASH for another one.  I wish you all the luck in the world. 

 

Hi Abbie - I just had the same thing happen to me with Equifirst today as well.  As I was reading your blog, one of my LOs was on the phone with Accredited about that deal.  According to our AE, they still do business bank statements (they need 24 months) and proof of self-employment (CPA letter, business license, etc.).   

Please Note:  I am not a big Accredited fan and I have no idea where your rate is going to be, but "any port in a storm," as they say.  Good luck!

Abbie:

 In today's market, this couple would not be considered sexy.  They may actually be considered ugly.  The 679 score suggests a lot of outstanding debt or some bumps along the way.  There are all kinds of conforming hits for that score now and then you add in the fact that they must go stated income creates a problem. 

Here is a question, did you run them conforming?  There may be some portfolio SIVA programs out there.  With that downpayment, I would see problem getting an approved eligible and then placing it on a portfolio product.  The only downfall would be if he did not have any othere verifyable assets besides the money for the downpayment.  Also, he would need a CPA letter showing atleast 2 years of SE. 

Let me know if that works.

Nate

Hi: Can you have them up their credit and do a rapid rescore? They're either 1 or 21 points away from a loan where they could probably go stated income. With that kind of cash, can they pay down debt (probably why their score is 679) and put less down? Then, a rapid rescore might work. It may take them 1-2 weeks, but could be worth it. If there are blemishes on their report within the past year, there may not be any help. Unfortunately, these are the loans that aren't getting done these days. Good luck! Let me know if you found a solution.

 

Paul

Wachovia has a stated program with a 620 assets play a huge part..that program was in place last week it is a portfolio loan, don't know what the dti is but DO has been approving up to 60+ with those assets, get an EA level approval and send them to flagstar

This is interesting!  A year ago you had a list of choice and AE in your office begging for the paper, now it's clod and dark out there. 

The simple answer here is to file the 2007 taxes a bit more reflective of his income and average the last two years.  If he doesn't want to pay the taxes, then you go hard equity and he'll have a higher rate.

In the long run, lenders will come back into this segment of bank statements or deposits, just because it "MAKES SENSE."  There are so many entreprenures that pay good money to lawyers and accountants to avoid payroll taxes and whatnot.  Many of these would make excellent borrowers, so the lenders will be forced to take another look.

I think the problem began with lenders doing bank statement programs on investment properties.  Business slows for our borrower, income dips, home values drop (and he has four of them now) . . . BOOM!

 

 

Yes I would suggest it be run conforming. Important to report their assets. Middle scores should be above 680 for the lowest middle of the two borrowers although if lowest middle of couple is below 680 that doesnt  not mean DU/DO won't take it. Equifirst was a good suggestion someone made but as you said program was dropped. You need to find a portfolio lender maybe for this one like Chase retail perhaps. What LTV 80%?

Countrywide was doing these up in til last month.  Maybe Banco Popular (www.bpnawholesale.com)

if they lend in your state I don't know , but it is 15% down and the rates (well no promises) double digits or close I would guess... Good luck let me know if this works for you!!!!

Frank Marta