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socalusa
266 Posts |
 Posted - 05/13/2008 : 4:13:43 PM
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| I've a deal and can't find investor for it. It's maximum cash out on an Investment SFR in California. Value is about $ 1,250,000, and FICO is 740. |
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EquitySmart
1117 Posts |
Posted - 05/13/2008 : 9:40:08 PM
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SISA + Investment + Cashout + (severely) declining market = LOTS OF RISK
What positive compensating factors does the borrower bring to this loan? Should we be impressed by the 740 credit score? This puts the borrower in the middle 20% of credit scores for everyone in the country = 740 FICO is not really very impressive:
http://www.myfico.com/CreditEducation/CreditScores.aspx
If you had millions of $ to fund loans, would you want to fund this loan? WHY? |
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socalusa
266 Posts |
Posted - 05/13/2008 : 11:43:11 PM
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quote:
Originally posted by EquitySmart
SISA + Investment + Cashout + (severely) declining market = LOTS OF RISK
What positive compensating factors does the borrower bring to this loan? Should we be impressed by the 740 credit score? This puts the borrower in the middle 20% of credit scores for everyone in the country = 740 FICO is not really very impressive:
http://www.myfico.com/CreditEducation/CreditScores.aspx
If you had millions of $ to fund loans, would you want to fund this loan? WHY?
I was not trying to impress anyone. FICO is an important description for a loan. Are you telling me I should give up on this deal?
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EquitySmart
1117 Posts |
Posted - 05/13/2008 : 11:50:39 PM
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quote:
Originally posted by socalusa
I was not trying to impress anyone. FICO is an important description for a loan.
Sorry for the confusion - I know you were not trying to impress anyone - I was just trying to point out that the 740 FICO is the only good thing you mentioned about this borrower, and 740 is not really much higher than typical credit scores for average US citizens (based on the data from MYFICO - who knows how accurate that data really is, but I digress).
You should only proceed with this loan if (1) there is some tangible benefit for the borrower and (2) you would be OK lending YOUR money to this borrower (if you had the funds) |
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socalusa
266 Posts |
Posted - 05/13/2008 : 11:58:10 PM
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quote:
Originally posted by EquitySmart
quote:
Originally posted by socalusa
I was not trying to impress anyone. FICO is an important description for a loan.
Sorry for the confusion - I know you were not trying to impress anyone - I was just trying to point out that the 740 FICO is the only good thing you mentioned about this borrower, and 740 is not really much higher than typical credit scores for average US citizens (based on the data from MYFICO - who knows how accurate that data really is, but I digress).
You should only proceed with this loan if (1) there is some tangible benefit for the borrower and (2) you would be OK lending YOUR money to this borrower (if you had the funds)
I make 12% when I lend my own money. Doubt it very much if someone with FICO of 740 would want to borrow at 12%. |
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EquitySmart
1117 Posts |
Posted - 05/14/2008 : 12:11:12 AM
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quote:
Originally posted by socalusa
I make 12% when I lend my own money. Doubt it very much if someone with FICO of 740 would want to borrow at 12%.
Then it would seem you have answered your own question. If you felt this loan was an acceptable risk (at the rate the borrower thinks is reasonable) then you would be willing to lend your own money to him at this rate. Apparently you are not. This indicates you agree with most (if not all) investors in the current market that there is too much risk in this scenario to provide reasonable rates to the borrower. Good luck with your loan. |
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socalusa
266 Posts |
Posted - 05/14/2008 : 08:29:57 AM
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quote:
Originally posted by EquitySmart
quote:
Originally posted by socalusa
I make 12% when I lend my own money. Doubt it very much if someone with FICO of 740 would want to borrow at 12%.
Then it would seem you have answered your own question. If you felt this loan was an acceptable risk (at the rate the borrower thinks is reasonable) then you would be willing to lend your own money to him at this rate. Apparently you are not. This indicates you agree with most (if not all) investors in the current market that there is too much risk in this scenario to provide reasonable rates to the borrower. Good luck with your loan.
Thank you for your kind remarks and optimism that you display in your posts. I hope the office that you manage would originate loans to your liking. |
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EquitySmart
1117 Posts |
Posted - 05/14/2008 : 08:53:24 AM
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| No offense intended. You just need to convey realistic expectations to your clients. A large problem these days seems to be unrealistic expectations (from originators and borrowers) about what loan programs are available in the current market. Again, good luck. |
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kevinsnfs
12 Posts |
Posted - 05/14/2008 : 09:20:18 AM
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wow all this is kinda harsh huh? something like this coulda been done easily about a year ago and there are (sometimes) still wacky smaller lenders out there that still do strange things.
I'm sure he was just looking for any hot tips or small investors that would be willing to look at the details of the credit report or SOMETHING.
I mean its obviously not a common sense slam dunk lets get this done kinda deal/scenario, but if it was would he be asking for help with locating a lender?
Anyway i'm new here so my 2 cents may not be welcome, but just a thought. |
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EquitySmart
1117 Posts |
Posted - 05/14/2008 : 09:25:07 AM
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| Good point, kevinsnfs - my responses yesterday were probably a little more harsh then necessary. However, you also make a good point (that many originators and borrowers fail to understand) = a lot of loans that were easy to place a year ago simply cannot be done in the current market. Hopefully this scenario can still be done (assuming there is benefit to the borrower) but I would guess not (though its possible I am wrong). |
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dpro0212
45 Posts |
Posted - 05/14/2008 : 09:29:10 AM
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Please provide some details..What county, LTV, amount of cash-out, number of NOO properties on credit, seasoning to property..etc...
I have an investor doing 75% C/O SIVA on NOO properties, 3 in the pipeline this month.
Reply if you wish: dprocopio@nationsfirstloans.com |
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jakeh@loanpacifi
111 Posts |
Posted - 05/14/2008 : 09:59:47 AM
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| We can fund up to 70% in a decling and 75% if it is not. |
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socalusa
266 Posts |
Posted - 05/14/2008 : 10:00:23 AM
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quote:
Originally posted by dpro0212
Please provide some details..What county, LTV, amount of cash-out, number of NOO properties on credit, seasoning to property..etc...
I have an investor doing 75% C/O SIVA on NOO properties, 3 in the pipeline this month.
Reply if you wish: dprocopio@nationsfirstloans.com
That would do for this client. I really don't want to go through another broker. Could you e-mail me at socalusa@hotmail.com the name of this lender. I'll reimburse you $ 250 for that information at closing. |
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