Agency Direct Meets Great Rates
In the past, I've blogged extensively about the benefits of agency-direct mortgage products (loans sold direct to Fannie Mae, Freddie Mac, and Ginnie Mae). These products are a must-have for lenders that work with real estate agents to ensure less than perfect borrowers still had a straightforward loan process with no snares of investor overlays. Overlays have been a bane to the mortgage business, and often loan officers don't even know the overlays of the investors their employer sells loans to -this causes those last minute "oops" that can at best delay a settlement, or at worst, derail the entire home purchase.
What are some perks of agency-direct products?
- No overlays for FICO scores. If Fannie, Freddie, or Ginnie like a file enough to issue an automated approval, the lender will do the loan (provided everything else meets requirements). Some lenders have implemented high FICO overlays (some will only do 660+ FICO scores for FHA borrowers and 640+ for conventional), but with agency-direct, lower FICO scores can be approved as well.
- No minimum borrower contribution. 100% of what the buyer has to put down and pay closing costs is a gift? With many investors, this poses a problem. In the world of agency-direct, this is perfectly OK.
- Investor want to buy a home but already owns 5 properties? Many investors won't finance someone if they already have 4+ properties with mortgages on them, but with an agency-direct product, we can finance up to 10 properties.
- Many, many more scenarios that fit agency guidelines that many investors won't touch.
In the past, agency-direct was a great perk, but it came at a cost. Rates were higher (while some investors had many pesky overlays, the risk mitigation resulting from those overlays allows more competitive pricing). Now, Mason McDuffie has matched the pricing on all agency-direct products to all investor products! What does that mean? Simply put, the best of both worlds - no pesky overlays, and rock solid interest rates.
We can now offer our lowest rates on agency-direct products for BOTH conventional and government (FHA/VA) products. This move will allow us to save clients more money and streamline the underwriting process, which is a win-win for everyone involved.
Bye-bye overlays, bye-bye guidelines that vary by investor, and hello to common sense, by the book underwriting coinciding with great rates! When everyone wins, it's a beautiful thing!