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mark85304
218 Posts |
 Posted - 04/29/2008 : 08:36:57 AM
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I have been tossing the following idea, but am not sure if it is possible:
Is it possible for the seller to credit the buyer money at the close of escrow if the money is to go towards the mortgage payment? The money would stay in escrow and they would be the servicing company making the payments on behalf of the buyer. So the money would stay in escrow the entire two years. Is this possible?
Or another idea I have is to have a realtor put in an offer for an REO, say through Wells Fargo. Then I will take the loan to Wells Fargo as well. Then try to work out a deal with Wells Fargo that instead of purchasing the property for say $20k less then what they were asking, purchase the property at what they are asking and have them in the note itself, state that there will be no payments for 2 years.
I hope this makes sense and am curious as to if this is possible.
Thanks again for the help! |
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gdjoe20
337 Posts |
Posted - 04/29/2008 : 08:41:30 AM
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quote:
Originally posted by mark85304
I have been tossing the following idea, but am not sure if it is possible:
Is it possible for the seller to credit the buyer money at the close of escrow if the money is to go towards the mortgage payment? The money would stay in escrow and they would be the servicing company making the payments on behalf of the buyer. So the money would stay in escrow the entire two years. Is this possible?
Or another idea I have is to have a realtor put in an offer for an REO, say through Wells Fargo. Then I will take the loan to Wells Fargo as well. Then try to work out a deal with Wells Fargo that instead of purchasing the property for say $20k less then what they were asking, purchase the property at what they are asking and have them in the note itself, state that there will be no payments for 2 years.
I hope this makes sense and am curious as to if this is possible.
Thanks again for the help!
I have seen the 1st senerio. The money was held in an escrow accout at a title company. Not sure how this was disclosed.
I doubt the 2nd senerio would happen. Wells or any other bank would not be able to sell that loan to anyone, and would rather take a 20k loss than be stuck with an un-sale able loan. |
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gsgroupinc
2036 Posts |
Posted - 04/29/2008 : 08:42:10 AM
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| Suntrust offers this up to 9% concession depending on how much is put down. |
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slants
4301 Posts |
Posted - 04/29/2008 : 08:43:19 AM
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| No. Payment abatement is pretty much a thing of the past. Which lender do you think would permit this? |
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mark85304
218 Posts |
Posted - 04/29/2008 : 08:46:58 AM
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| The idea came from an associate of mine who, with a local bank, bought 37 of their REO properties and that bank financed all the properties and agreed and put in the note that there will be no payments for 2 years. I know that this was probably because this was a smaller bank who does not sell off their loans, but thought it might work with some other banks as well. |
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rtrefflich
3892 Posts |
Posted - 04/29/2008 : 08:47:32 AM
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Concessions are different from payments. The best case scenario at using concessions for part of your "payment" is if the lender/escrow/title will let you get away with using them as part of the recurring closing costs.
quote:
Originally posted by gsgroupinc
Suntrust offers this up to 9% concession depending on how much is put down.
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EMScommercial
5141 Posts |
Posted - 04/29/2008 : 08:48:17 AM
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| are they rolling the payments into the financed amount? (interest reserve) |
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brandie
3260 Posts |
Posted - 04/29/2008 : 08:50:30 AM
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Sorry but asking the sellers to credit 2 yrs of mortgage payment to the buyer is stupid. If the sellers wanted to keep making a mortgage payment on the property, they would have not placed it on the market in the first place.
Plus, have a servicing company make the paymentss on the be half of the buyer is placing little red flags.
What if the servicing company merges or shuts down their business, how are the payments still going to sent out?
I am sure that there are going to be fees involved to the seller so why go through away you are thinking, while that buyer can have payments automaticly withdrawaled from their own personal bank. |
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gsgroupinc
2036 Posts |
Posted - 04/29/2008 : 08:51:39 AM
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| http://www.newsnet5.com/money/16054905/detail.html?rss=nn5&psp=news |
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mark85304
218 Posts |
Posted - 04/29/2008 : 08:52:59 AM
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quote:
Originally posted by EMScommercial
are they rolling the payments into the financed amount? (interest reserve)
Not necessarily. I was just thinking more of instead of purchasing the property for $10k-$20k below what they were asking, offer them the full asking price and put some type of verbiage in regards to- $20k to be placed in escrow and to remain in escrow to make mortgage payment on behalf of buyer. Or something similiar to this verbiage as I have not thought much of this yet as I didn't even know if this is possible. |
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slants
4301 Posts |
Posted - 04/29/2008 : 08:53:37 AM
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quote:
Originally posted by EMScommercial
are they rolling the payments into the financed amount? (interest reserve)
There were a few banks doing them until recently. Flagstar and national City just canceled the 6 months payment abatement program and I haven't heard of anyone else with the program still. It is not interest reserves. You can't collect 6 months of interest in reserves because any prepayment must be applied to principle, not future interest not yet accrued. It has to be placed into an escrow account to be disbursed monthly, but no one left with the program. BTW, 2 years without payment is not the same as 2 years payment abatement placed into escrow. |
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slants
4301 Posts |
Posted - 04/29/2008 : 08:56:53 AM
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quote:
Originally posted by gsgroupinc
http://www.newsnet5.com/money/16054905/detail.html?rss=nn5&psp=news
Incentive rebate if someone bought the condo and stayed for 2 years, not credit toward mortgage payments. |
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rtrefflich
3892 Posts |
Posted - 04/29/2008 : 08:58:21 AM
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That was done by the city not by the lender. There are also cases here in So Cal where builders paid HOA fees, gave away new cars and other incentives to entice people to buy. They may have had some type of deal with the bank set up, but because of the volume they were doing it was possible, I doubt that a lender would allow one person to do it, and how would it be disclosed?
quote:
Originally posted by gsgroupinc
http://www.newsnet5.com/money/16054905/detail.html?rss=nn5&psp=news
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mganovsky
2114 Posts |
Posted - 04/29/2008 : 09:06:38 AM
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| I have seen builders offer no payments for 6 months, but every thing must be disclosed in the contract and the appraisor must value the residence including the dollar amount of the payments. |
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slants
4301 Posts |
Posted - 04/29/2008 : 09:15:03 AM
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quote:
Originally posted by mganovsky
I have seen builders offer no payments for 6 months, but every thing must be disclosed in the contract and the appraisor must value the residence including the dollar amount of the payments.
Problem is lenders who used to have the 6 months abatement programs have all discontinued the practice, probably precisely because the sales price/appraisals were being inflated to cover the payment credits. |
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mark85304
218 Posts |
Posted - 04/29/2008 : 09:32:43 AM
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| That is another question I had as well is how do you disclose it. Would it be similiar to an escrow hold back for say a pool to be built? |
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slants
4301 Posts |
Posted - 04/29/2008 : 09:38:12 AM
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quote:
Originally posted by mark85304
That is another question I had as well is how do you disclose it. Would it be similiar to an escrow hold back for say a pool to be built?
Yes, but moot. No lender will agree to it. None. Dead program that went away with the 100% loans. |
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jillstatz
661 Posts |
Posted - 04/29/2008 : 09:45:25 AM
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| First Horizon still has the interest abatement programs on there rate sheets at this time. Don't know if the program is still valid though you would have to call and check on it with them. |
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mark85304
218 Posts |
Posted - 04/29/2008 : 10:38:15 AM
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| I am not referring to an abatement program. I am referring to in exchange for a full price offer, having the seller place say $20k in escrow and having the escrow company make the buyers payments out of escrow out of the $20k |
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slants
4301 Posts |
Posted - 04/29/2008 : 11:13:45 AM
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quote:
Originally posted by mark85304
I am not referring to an abatement program. I am referring to in exchange for a full price offer, having the seller place say $20k in escrow and having the escrow company make the buyers payments out of escrow out of the $20k
That is the definitive description of payment abatement = seller credits buyer monies to use toward future payments thus "abating" buyer's payments for a period of time. Never been allowed for more than 6 months and probably not allowed at all anymore. Extremely high potential it results in an inflated purchase price to allow the seller to net the same proceeds. In essence, the new lender will be financing the escrowed future payments over and above the true cost of purchase because the official purchase price is $20,000 higher. Lenders always review the Seller's Hud at closing for this very reason. Any credit from seller to borrower could have potentially inflated the true purchase price and they will evaluate accordingly. |
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d_damiano
555 Posts |
Posted - 04/29/2008 : 11:48:14 AM
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quote:
Originally posted by mark85304
I am not referring to an abatement program. I am referring to in exchange for a full price offer, having the seller place say $20k in escrow and having the escrow company make the buyers payments out of escrow out of the $20k
Mark it won't happen the way you describe it, as it would be considered an inducement to purchase problem.
There is a legal and fully compliant way to do it and get to almost the same place, and it's not an abatement program, but an earned income program outside of the real estate transaction.
The buyer takes a part time job selling memberships to the largest trade association of property owners in America - TheOwnersAlliance.org. He asks the seller if he would like to purchase the membership for $325.00 per month up to 360 months, the seller benefits by getting a real product that's value exceeds it's price and receives member benefits that can save them between $300-$1000.00 per month or more, on the goods and services they buy every day from over 1000 of america best companies.
The seller has two choices when purchasing their membership. Choice 1 is pay for it today or choice 2 defer the payment and pay for their membership out of the proceeds of their sale (they give an assignment of funds form to the settlement company).
The buyer/dealer gets paid the commission $292.50 per month up to 360 months or $105,000.00 when the sale is made and the money is deposited into their savings account. BTW, you get a VOD and a VOE and a copy of the pay stub, so you now have sourced and verified funds and if you want to use this commission for down payment, or paying off debt, or buying down a rate, fixing up the house, whatever the buyer wants it's his paycheck, including sticking their sales commission into an account that pays 6 months or 1 year or two years of mortgage payments, you can.
Totally legal and compliant with every guideline and available to do today!
If you are going to use this part time job for down payment, you can't use the part time income to qualify for the home loan, (No DTI) but the asset (commission) is sourced and verified and you can use it. BTW, there is no seasoning on a pay check
The only downside is the buyer who recieves this large commision check has to pay income taxes on it and will receive a 1099 at the end of the year. I just recommend to my clients that they sell a longer membership and sock away the extra commissions to pay the taxes.
The guy you want to call is Marlo Newman at http//www.thedownpaymentguynetwork.com or call him at 877-374-8941 ext 1.
As far as I know this is the only way to get this done in todays market conditions.
BTW, I have not been doing 2 years of mortgage payments, but I have promotions running right now at one property that has done 11 deals in the last 10 days that says:
Buy This property with the down payment provided, no closing costs, no HOA fees for a year, your moving costs paid for and no payments until November
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slants
4301 Posts |
Posted - 04/29/2008 : 2:00:51 PM
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quote:
Originally posted by d_damiano
The buyer/dealer gets paid the commission $292.00 per month up to $105,000.00 when the sale is made and the money is deposited into their savings account. BTW, you get a VOD and a VOE and a copy of the pay stub, so you now have sourced and verified funds and if you want to use this commission for down payment, or paying off debt, or buying down a rate, fixing up the house, whatever the buyer wants it's his paycheck, including sticking their sales commission into an account that pays 6 months or 1 year or two years of mortgage payments, you can.
$292.00 per month X 36 mos. = $10,512.00 = 12 mos. of payments on a very, very small loan, won't pay for 2 years' mortgage. |
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d_damiano
555 Posts |
Posted - 04/29/2008 : 5:49:05 PM
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quote:
Originally posted by slants
quote:
Originally posted by d_damiano
The buyer/dealer gets paid the commission $292.00 per month up to $105,000.00 when the sale is made and the money is deposited into their savings account. BTW, you get a VOD and a VOE and a copy of the pay stub, so you now have sourced and verified funds and if you want to use this commission for down payment, or paying off debt, or buying down a rate, fixing up the house, whatever the buyer wants it's his paycheck, including sticking their sales commission into an account that pays 6 months or 1 year or two years of mortgage payments, you can.
$292.00 per month X 36 mos. = $10,512.00 = 12 mos. of payments on a very, very small loan, won't pay for 2 years' mortgage.
oops is 292.50 per month and you can sell up to 360 months, so sell a bigger membership
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slants
4301 Posts |
Posted - 04/29/2008 : 5:52:00 PM
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quote:
Originally posted by d_damiano
quote:
Originally posted by slants
quote:
Originally posted by d_damiano
The buyer/dealer gets paid the commission $292.00 per month up to $105,000.00 when the sale is made and the money is deposited into their savings account. BTW, you get a VOD and a VOE and a copy of the pay stub, so you now have sourced and verified funds and if you want to use this commission for down payment, or paying off debt, or buying down a rate, fixing up the house, whatever the buyer wants it's his paycheck, including sticking their sales commission into an account that pays 6 months or 1 year or two years of mortgage payments, you can.
$292.00 per month X 36 mos. = $10,512.00 = 12 mos. of payments on a very, very small loan, won't pay for 2 years' mortgage.
oops is 292.50 per month and you can sell up to 360 months, so sell a bigger membership
You didn't just type $292, but a max of 36 months. |
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Wupadupa
187 Posts |
Posted - 04/29/2008 : 6:34:17 PM
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Some of the Real Estate developers in California and LAS VEGAS are offering
NO MORTGAGE PAYMENTS FOR 2 YEARS
No Closing Costs
NO Downpayment
PAY NOTHING FOR 2 years
All of it paid for by the developers and their incentive programs.
Catch is, most of these houses are over $800k in declining markets, you have to go thru the developers in house lender + you have to go full doc. |
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slants
4301 Posts |
Posted - 04/29/2008 : 6:38:12 PM
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quote:
Originally posted by Wupadupa
Some of the Real Estate developers in California and LAS VEGAS are offering
NO MORTGAGE PAYMENTS FOR 2 YEARS
No Closing Costs
NO Downpayment
PAY NOTHING FOR 2 years
All of it paid for by the developers and their incentive programs.
Catch is, most of these houses are over $800k in declining markets, you have to go thru the developers in house lender + you have to go full doc.
If they are lending their own money or through a portfolio lender, they are free to do anything they want, but not gonna be able to sell the paper. |
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d_damiano
555 Posts |
Posted - 04/29/2008 : 7:08:24 PM
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quote:
Originally posted by Wupadupa
Some of the Real Estate developers in California and LAS VEGAS are offering
NO MORTGAGE PAYMENTS FOR 2 YEARS
No Closing Costs
NO Downpayment
PAY NOTHING FOR 2 years
All of it paid for by the developers and their incentive programs.
Catch is, most of these houses are over $800k in declining markets, you have to go thru the developers in house lender + you have to go full doc.
Nice, the way I described you can go FHA, conventional, hard money or portfolio Jumbos |
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mark85304
218 Posts |
Posted - 04/29/2008 : 10:44:35 PM
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| I am in the processing of calling around a bunch of lenders to see if they will allow this. I don't see why there would be a problem if the purchase price was at least 10% below market value along with a down payment and everything was disclosed. The lender should feel very secure as they are guaranteed on time payments for two years. |
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d_damiano
555 Posts |
Posted - 04/29/2008 : 11:59:03 PM
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quote:
Originally posted by mark85304
I am in the processing of calling around a bunch of lenders to see if they will allow this. I don't see why there would be a problem if the purchase price was at least 10% below market value along with a down payment and everything was disclosed. The lender should feel very secure as they are guaranteed on time payments for two years.
Mark, keep us informed, it's always helpful to have more than one way of doing things :)
Thanks,
Dennis |
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ZoolanderMSM
220 Posts |
Posted - 04/30/2008 : 3:44:50 PM
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Premier Mortgage Resources used to do PITI abatement up to 6 months. I haven't seen the rep in a while, so I don't know if they're still doing it.
Someone was asking about why would you use a product like this. It is definitely a sales tool, especially for builders. |
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