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Having Your OREO and Depleting It Too
Having Your OREO and Depleting It Too
 
Asset-backed or asset qualifying mortgages are not endangered species around here.  Not a week goes by where we don't field an inquiry from a home buyer or homeowner seeking a mortgage but devoid of the typical income qualifying requirements; paystubs, W-2 forms and tax returns that show what they really earn in any year.  So using assets to qualify for a mortgage has become a viable alternative for those who have strong credit and who have demonstrated the ability to save and invest.  These individuals can often parlay their (liquid) net worth into qualifying power, and maybe the best part is that they do not need to sell or otherwise touch those assets.  Asset depletion, asset utilization, asset amortization or asset-backed loans --- whatever you want to call them --- are, indisputably, no longer mortgages relegated to the high-rate outer fringe of the lending industry.  
 
But up until this time, one of the major hindrances to qualifying for an asset-backed loan is that we have not permitted borrowers to use the equity in other real estate owned (OREO) as a way to qualify.  Yes, we count cash-equivalents, stocks, bonds, mutual and exchange-traded funds and even retirement accounts ... more

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