Below the fold is a memo sent to a mortgage broker in Charlottesville. In short, anybody associated with the real estate industry will have to put down at least a 10% down-payment and will be facing much greater scrutiny on their loans. Verifying income is something that frankly should have been done all along; but shouldn’t somebody who is able to document solid income for two or three years be able to borrow higher amounts?
From the broker who sent this to me –
So, Jim, my problem is with the discrimination against Real Estate professionals.Â There are many industries that one might assume a lower income stream right now versus last year.Â That is no reason to disallow a 95%-100% CLTV.Â I can prove my income stream has been steadyÂ and consistent since 2001.Â Why punish me?Â Theoretically, you could do a 95% first loan with PMI under this scenario, but why would you?Â Almost always the 80/15/5 route is better in term of monthly payment and the MI deduction is fazed out completely at $109,000 AGI.Â The choice just makes it easier to go to another lender.
—No other lenders have indicated this, but every day (I mean every day) we get notices about programs that are being modified, to become more restrictive.Â We’ve even (temporarily) lost the ability to originate stand-alone seconds with (another bank).Â They have shut off the origination side to brokers and even my Account Executive doesn’t know whether his job is safe.Â Fortunately, we maintain multiple relationships, so we have other home equity solutions for clients.
Real Estate Professionals – Applies to InterFirst CES Only
Loans to Real Estate Professionals are subject to the following:
– The maximum CLTV permitted isÂ 90%.
– Stated income and/or statedÂ assets are not permitted.
– The borrower’s income, assetsÂ and employment must be verified.
– Real Estate Professionals, asÂ used in this policy, include:
– Real Estate Brokers, RealÂ Estate Agents, and employees of Real Estate Brokers or Agents
– Property Managers and employeesÂ of property managers/management companies
– Home Improvement Dealers andÂ contractors and their employees
– Home Builders and GeneralÂ Contractors, and their employees
– Real Estate Investors (DefinedÂ as any person who owns more than two properties)
– Mortgage Broker or any employeeÂ of a mortgage broker.
– Principals, officers andÂ employees of any mortgage lender (excludes national banks).
– Title company principals,Â managers, or employees.
– Real Estate Appraisers or anyÂ employees of real estate appraisers or appraisal management companies.
Lest we forget though – there are opportunities everywhere. Apparently “Cameron” is willing to give me a loan. 🙂 Ah, spam.
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