Another "Agency Direct" Bonus

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Mortgage and Lending with Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, NMLS #138061 MMCD #1141

Another "Agency Direct" Bonus

 

 

     One of the loan products I love being able to offer is our agency-direct product.  We sell these loans directly to Fannie Mae and/or Freddie Mac, Freddie Directand because of this, there are NO investor overlays.  There are many, many benefits to a lender having this ability, and in the past I wrote a blog about some of the things we can do with our Fannie Direct program that many other lenders cannot. 

 

 

 

     Though I do a pretty good job of keeping up on my loan products and knowing everything we can offer, I do learn new things pretty often, and today was no exception.  (This is because the agency selling guides, although very thorough in regard to what the agencies can offer, are less exciting to read than a dictionary, and over 1000 pages each, updated annually.  Sorry folks, I can't keep up 100% with that kind of drudgery)

 

 

     As it turns out, with our "Freddie direct" product, we are able to help borrowers obtain mortgage financing without regard to bankruptcy or foreclosure seasoning.  Fannie & Freddie both have seasoning guidelines for different types of bankruptcy, foreclosure, and other guidelines for bankruptcies as a result of documented, extenuating circumstances, and in the past I believed these seasoning requirements were set in stone.  For loans that go to Fannie Mae (and every investor I know of), I believe this is the case.  However, I received clarification from Freddie Mac that seasoning guidelines are issued for manually underwritten files only.  What this means is that if a file is run through Freddie Mac's automated underwriting system, LP, and is "Accepted", the loan can be funded regardless of a foreclosure or bankruptcy in the borrower's recent history.

 

 

     What does this mean?  Well, let's start with what it does NOT mean.  It does not mean any borrower with a recent bankruptcy (BK) or foreclosure is going to be able to get approved.  LP is a system with algorithms that are pretty good at determining if a loan file is a good risk.  Most credit histories indicating a foreclosure or bankruptcy are not going to be found to be a good risk, and although there are no set guidelines on "compensating factors" to get LP to like the file in spite of a bankruptcy or foreclosure, it's safe to say it would have to be an extremely strong file aside from the BK/foreclosure to get an "Accept" issued.

 

 

     What it does mean, though, is that a borrower with some really strong qualifications, such as a very low debt/income ratio, large down payment, high credit score, and a high amount of asset reserves should not be dissuaded from applying for a conventional mortgage just because of a somewhat recent bankruptcy or foreclosure.  Admittedly, the Freddie direct program is the only option we'd have for someone in this position, so figuring out whether they're able to qualify would be a pretty quick process, but it certainly wouldn't hurt to try.

 

 

     This isn't a game changer, as there are few borrowers going to get through LP with an "Accept" with a recent bankruptcy or foreclosure, but if you're one of the agents with a client that can take advantage, it would be good to keep in mind.  Knowing this program exists can make you a superstar to someone that thinks they're automatically excluded from getting a conventional loan, or someone that's been declined elsewhere.

 

 

There are plenty of advantages to our agency-direct programs - if you'd like to know what they are, follow my blog as there's much to come, or shoot me an email and I'd be happy to share some of the more common advantages of the Freddie- and Fannie-direct loan programs.

 

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Tags:
conventional loans
bankruptcy mortgage
mortgage guidelines
foreclosure mortgage
conventional guidelines
freddie direct
agency direct

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Rainmaker
3,304,110
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

What does this mean?   From reading it, I'd say it means that contacting you will lead to the best possible results.

Nov 06, 2014 02:48 PM #1
Rainmaker
3,195,254
Endre Barath, Jr.
Berkshire Hathaway HomeServices - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

John, even the reader's digest version can become daunting to read, so I must echo Micheal's comment of Contacting you is the Wise decision!, Endre

Nov 06, 2014 02:54 PM #2
Rainmaker
2,248,471
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning John. Nice job with the explanation, but not easily understood by folks that are not in the business.

Nov 06, 2014 05:21 PM #3
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

John, That really is a great benefit for those that have had some problems in the past. This post will help you get some of that business and give many borrowers hope.

Nov 06, 2014 10:08 PM #4
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John Meussner
Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA, - Walnut Creek, CA
#MortgageMadeEasy Walnut Creek, CA 484-680-4852

Michael Jacobs Thanks exactly what it means!  Ha, it really just means a good borrower shouldn't assume they're excluded from getting a loan JUST because of a recent BK or foreclosure.

 

Endre Barath, Jr. I tried to keep the jargon out and make it as easy as possible, but when talking about Freddie Mac, their selling guide, automated underwriting system, etc, it's tough to do. 

 

Joe Petrowsky Thanks for commenting - good reminder that it's sometimes jibberish to people who aren't doing it every day! 

 

Debbie Reynolds it is a nice option for some people out there that probably think they can't get a loan.  The tough part is making that small demographic aware. 

Nov 07, 2014 12:40 AM #5
Rainmaker
1,286,171
Jon Kolsky
Kolsky Realty & Management - Long Beach, CA
Licensed California Real Estate Broker

John Meussner ~ I know when you endorse something it has to be great, and I am positive that the agency-direct product will be beneficial to many just as you've explained

Nov 07, 2014 05:34 AM #6
Rainmaker
2,394,939
Evelyn Johnston
Friends & Neighbors Real Estate - Elkhart, IN
The People You Know, Like and Trust!

John, I am impressed that you read them at all!  I can't imagine how exciting it would be...

Nov 11, 2014 09:30 AM #7
Rainmaker
304,045
Tammy Adams ~ Realtor / Podcaster
Maricopa Real Estate Co - Maricopa, AZ
A Maricopa Agent who Works, Lives & Loves Maricopa

that is news to me. thanks for sharing. I echo the others with having people call you!  lol

Nov 13, 2014 06:02 AM #8
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John Meussner

#MortgageMadeEasy Walnut Creek, CA 484-680-4852
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