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Loosening The Purse Strings, A Rare Product These Days For Investors!

This post will hopefully prove to be helpful information on two fronts. First, this is really good news for Real Estate Investors who for whatever reason have a hard time documenting their income. Second, I'm going to throw a bone out to other Mortgage Folks out there as to a Niche Investor that can place some loans that you may have a difficult time in placing.

This is a reminder that I am still doing Stated Income on Investment Properties. There is no seasoning requirements for this product. This will come in especially handy for folks who have been buying properties with cash or rehabbing them who want to turn around and take cash-out immediately.

ATTENTION REAL ESTATE INVESTORS!

SISA (Stated Income, Stated Asset): We can finance you up to 75% cash-out of the appraised value with a 700 score. If you simply want to do a rate/term refinance or purchase another investment property, they will go to 75% LTV with 680 scores or higher.

SIVA (Stated Income with Verifiable Assets...6 months PITI reserves required): PITI reserves mean 6 months of your principal & interest payment on your mortgage along with the taxes and homeowner's insurance. An example is if your Principal & Interest mortgage payment is $800.00, your real estate taxes are $150/month and your homeowner's insurance is $50.00/month. So, your total PITI (not to be confused with Pity;-) is $1000.00. You would need at least $6,000.00 in reserves in the bank or in a retirement or investment account. With this product, we can do a no-seasoning cash-out refinance down to a 680 score.

Sure, the LTV's are low but there are property investors out there looking to capitalize on the soft housing market in some areas and may need liquidity from their non-liquid assets to take full advantage of current market conditions.

And for all you Mortgage Folks out there, my rep for this Investor is relatively new to Active-Rain. Her name is Beth Forbes and I've known her for 7 years, since I came to the Lehigh Valley. If you click here, you will be sent to her AR Profile and also have her contact info. They can do loans in many states so give her a shout and check out her blog. And if she has any negative things to say about little old me, she's probably right ;-)

Jason Sardi

Mortgage Consultant

First Choice Equity Group Inc.

610-439-2166 ext. 229

jsardi@fcegi.com

Posted by Jason Sardi, Mortgage Banker on 04/11/2008 02:32 PM

Comments (22)

no seasoning, real estate investors, pennsylvania, stated income, lehigh valley

Originally posted at: Real Estate Financing...: Loosening The Purse Strings, A Rare Product These Days For Investors!

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22 Comments on Loosening The Purse Strings, A Rare Product These Days For Investors!

APR

2008

Great information Jason. Thanks for letting us know that those loan products are still available. BTW, "Seisining" in the way you are using it, is spelled like this.

Wow.... Never realized retirement savings could be used as reserves. Guess I'm still in denial that anyone with 25% down and a decent credit score would have trouble financing their purchase.

Lisa - Ok, you lost me with the "Seisining" thing:-)

Dan - If they are buying an investment property and can't document their income (show capacity to pay the loan back)....yeah, it's not an easy loan to do. The risk factor is high, we aren't talking primary residences here.

Honestly, I'm afraid to even ask her about you :-) I suspect I don't want to know. But I do wonder whether she's licensed in Oregon for this program??

Jason, good to know. Are you doing many of these loans right now? I'm finding investors out here still being pretty cautious?

Jason - I think that as the market starts to turn, we may see ltvs up to 80%. Hope all is well.

It's amazing that more and more of these products are starting to resurrect here.

Jennifer - I'm sure you know I'm an open book, she won't tell you anything you don't already know. MWA!

Greg - I haven't done one of these particular loans for at least 8 months now. The product seems to make sense and is priced accordingly.

Shaun - Hey man, good to see read ya! In my honest estimation, I don't mind the purse strings loosening from the perceived extreme they seem to be at, yet some of the products of the past were pretty ridiculous. I hope to never re-visit that aspect either.

Larry - I'm anxious to hear what you think. To me, I'd offer this kind of loan all day along. Especially if it was my money.

APR

2008

Jason, Very interesting. I knew these were available, but... Some great information. Thanks!!

APR

2008

This is good information. I still hate stated income, is that just believing someone else's story without checking it out?

Marc - It's about time, eh? Always nice hearing from you amigo!

Robert - I do know what you mean. I'm not a huge fan of stated income loans, but they are a product needed by some. And some of them actually make sense. As long as they make sense and are priced accordingly, I feel it is a Win-Win.

I think with the parameters set forth that it becomes a definite no brainer. However, I do wonder about the "slippery slope" you know? AHM was so agressive in being the first to get into a certain profiles, but now....they're gone. You programs do seem prudent and responsible, but after all that I've seen jump back in the market recently, I wonder who's going to join in and expand to another dangerous level.

APR

2008

Larry - I totally understand you there, we are on the same page. I'm hoping the 'players' involved will learn and not repeat past mistakes.

APR

2008

This is a really good product - if you have an Investment Property meetup.com group in your area you should go and give them this info!

I'll look them up Eleanor, thanks!

APR

2008

Jason,

Question ...although there are no seasoning issues with the investor...what about if the investor turns around and tries to sell it to a consumer...I gather the consumer might have a seasoning issue for 3-6 months to justify lending them the money based on why the investor got it lower and can turn it over at a premium in a short period of time?

Sardi

Are you limited to Pennsylvania, or where can you lend?

Good to know that stated income is still around. For investors as well as self-employed people like us, we need these products since we don't have a regular weekly paycheck!

Neal - That's a very good question. The thing that the Investor should realize(if selling is his/her Exit Strategy) is that seasoning may be an issue for the potential buyer in getting financing to buy the property at a new and enhanced sales price. It's better to address that issue up front and make sure the buyer has financing in place where this won't be an obstacle. You raised an excellent point Neal!

Bill - Yes, just Pa for now. Email me at jsardi@fcegi.com if you want me to drop you the name of my investor who does this and of what states they can do this in. Perhaps they can help you out.

Rick- Yes, there's definitely a legit market for these types of loans.

JUN

2008

its is great to see these type of loans coming back, it is a great sign for our industry

JUL

While I don't mean to totally ignore Mr. Kellow, Hassan brings up a fantastic point. Hassan, you bastard, where have you been? I've always wanted to be a nurse, so thanks for the link. New actions do bring new strength. Speaking of which, I have an action and it involves a silver dollar and lube. But you'll never read this, will you? Don't matter to me, dress it up as you may... spam is spam. Most folks are onto it by now. I just like to talk and write to automated systems because it makes me feel smart:)

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