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peter
4543 Posts |
 Posted - 08/27/2008 : 10:57:58 PM
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There are millions of borrowers who cannot save any money
nor can fully document their incomes. They purchased their
homes during 2002 to 2007 with SISA loans as much as 100% LTV
or CLTV (like 80/20). Many even with 80% Option Arm 1st and
20% Heloc 2nd, under SISA or Stated Income Stated Asset.
Now, with the SISA loan programs for conforming and jumbo
are disappearing or requiring high FICO, i.e. 720 and up with
lower LTV such as 70%, what will happen to those borrowers
with FICO less than 720 and need refi at higher than 70% LTV,
on a Stated Income/Staed Asset basis. Let's say above 70% LTV.
What loan programs are still available to them now? I have
not seen any lender offering SISA higher than 70% LTV and
with FICO lower than 720. Is there any SISA lender out there
who can?
Peter
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dkendall1979
10147 Posts |
Posted - 08/27/2008 : 11:04:38 PM
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Uhh, Peter...
Have you been living in a cave? |
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peter
4543 Posts |
Posted - 08/27/2008 : 11:24:45 PM
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We need a portfolio lender who can replace Wachovia Wholesale
SISA program that once allowed SISA borrower up to 80% (That
was back early this year) with min 660 FICO. With the closing
of Wachovia Wholesale, there has not been anyother portfolio
lender who can bridge the gap between A paper and hard money
with more decent rates than hard money lenders and at high
LTVs to 80% LTV or so.
I don't know every lender on earth and I wonder if there are
stil lenders who can lend on SISA between 660 to 720 at even
higher rates but lower than hard money rates.
Anybody knows? We all have half of California homeowners
who are SISA by birthmark and would want this program.
Peter |
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d_damiano
548 Posts |
Posted - 08/28/2008 : 12:01:06 AM
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They will probably end up in a loan mod. Anyone want any of these foreclosures coming in the next wave?
The only buyers will be the Hedge fund managers that have been short or buying puts and paying off the politicians to make the market even worse.
But it's probably a good idea to force a really good depression, I mean change only comes with true capitulation and who really cares about the poor or over extended? |
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darkstar
18089 Posts |
Posted - 08/28/2008 : 05:45:13 AM
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| Unless they're hurting, they just can't refi, it's not like they have to and shouldn't be an issue... |
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Mandyvilla
3405 Posts |
Posted - 08/28/2008 : 06:08:57 AM
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As an industry, we put thousands of people into homes they could not afford with programs like the Wachovia Option ARM. If I am hearing right, you are asking how we are going to continue doing that?
Quite simply, they should not be able to replace a loan they couldn't afford in the first place. Even if the loan is modified, goes thru a short refi or any sort of compromise, foreclosure is just a matter of time. It's our responsibility to call this as we see it early on in the process, break the news early, and not prolong any agony. Sounds cold, but how many have we seen pay precious dollars that could have been better spent finding housing? |
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CoolMtgGuy
3658 Posts |
Posted - 08/28/2008 : 06:40:30 AM
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| It's groundhog day and the date is August 28th, 2006! |
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mganovsky
2049 Posts |
Posted - 08/28/2008 : 06:47:53 AM
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As a start the home owner could go to H & R block to redo or amend his tax returns for the last 2 years; then he might be OK going full doc.
Lenders should have qualified the option arms and interest only loans at the fully indexed 30 yr rate. But too many Realtors pushed folks in to homes they could not afford unless they took an option arm or interest only loan.
And I know I have heard in Calif if you want a home you have to pay $300K and up for a shack, but those folks should have just rented instead of getting in over thier heads.
I do not feel sorry for any of them, except the folks who took out the option arm when it was not explained in full to them; or the LO used words like "deferred Interest" instaed of telling them the truth and calling it "Neg AM".
But again at closing they signed the Documents from the lender that explained everything in detail.
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PBFinancial
410 Posts |
Posted - 08/28/2008 : 11:13:26 AM
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Loan modification
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Scrooge McDuck
8753 Posts |
Posted - 08/28/2008 : 11:15:01 AM
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| joe will do those loans. |
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hulkfunding
108 Posts |
Posted - 08/28/2008 : 2:04:13 PM
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Self-employed borrowers will have virtually no choice but to start reporting more income on their tax returns immediately. After two years they can try to get into a full doc loan, assuming that they legitimately show enough income to DTI.
The system needs to purge, and in the future everyone should have to qualify full doc. Perhaps this will help keep federal income tax rates down as the overall tax revenues might increase significantly when more S/E people start to pay their fair share.
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jmarx
4 Posts |
Posted - 08/28/2008 : 2:23:05 PM
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quote:
Originally posted by dkendall1979
Uhh, Peter...
Have you been living in a cave?
Thanks for saying what everyone was thinking. |
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Captain Mortgage
1721 Posts |
Posted - 08/28/2008 : 2:43:10 PM
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| So when these guys who can't save money refi from their 1% into a 6% loan. How will that even help them? |
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peter
4543 Posts |
Posted - 08/28/2008 : 11:03:58 PM
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I think one of the solutions is to quit claim to a family
member who has a higher FICO (say over 700) and with assets.
Then, since SIVA is still available, see if you can refi
rate and term with a SIVA lender who does not require
title seasoning. Or, if the new borrower is a family member
who can show proof of residence in the house via utility
bills, W-2s, etc, then it would be easier.
And if it happens that a family member has over 680 score,
or even a little less, but can go full doc to qualify for
a new rate and term refi, then you can accomplish the refi
thru that family member. Lenders do have seasoning requiremtns,
and most of them do need 1 year of title seasoning. Some
lenders may not require more than 6 months if proof of
residency or vested interests can be furnished.
I had one file in which the father being a self-employed
business owner and obtained a SISA loan for his house decided
to quit claim the house to a daughter and refi'ed the house
into a new 80% loan after 1 year of putting her on the deed.
In some cases, the SiSA homeowner does an "arm's length
sale" to a family member and this can be accomplished in
FHA "Identity of Interest" feature which indeed allows for
an arm's length transaction.
With the population of SISA homeowners who are not able
to refinance, and people are devising creative ways to get
things done, I wouldn't be surprised to see more and more
of FHA "Identity of Interest" loans or regular conventional
loans refinanced under a newly qualified full doc family
member thru granting on or quit claiming.
I am doing one such FHA loan and only 85% max LTV is
allowed for the mother to sell the house to her son.
Under Identity of Interest FHA loans, an arm's length
transaction is indeed allowed.
Peter |
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propertylender.c
1276 Posts |
Posted - 08/28/2008 : 11:22:24 PM
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quote:
Originally posted by peter
I think one of the solutions is to quit claim to a family
member who has a higher FICO (say over 700) and with assets.
Then, since SIVA is still available, see if you can refi
rate and term with a SIVA lender who does not require
title seasoning. Or, if the new borrower is a family member
who can show proof of residence in the house via utility
bills, W-2s, etc, then it would be easier.
And if it happens that a family member has over 680 score,
or even a little less, but can go full doc to qualify for
a new rate and term refi, then you can accomplish the refi
thru that family member. Lenders do have seasoning requiremtns,
and most of them do need 1 year of title seasoning. Some
lenders may not require more than 6 months if proof of
residency or vested interests can be furnished.
I had one file in which the father being a self-employed
business owner and obtained a SISA loan for his house decided
to quit claim the house to a daughter and refi'ed the house
into a new 80% loan after 1 year of putting her on the deed.
In some cases, the SiSA homeowner does an "arm's length
sale" to a family member and this can be accomplished in
FHA "Identity of Interest" feature which indeed allows for
an arm's length transaction.
With the population of SISA homeowners who are not able
to refinance, and people are devising creative ways to get
things done, I wouldn't be surprised to see more and more
of FHA "Identity of Interest" loans or regular conventional
loans refinanced under a newly qualified full doc family
member thru granting on or quit claiming.
I am doing one such FHA loan and only 85% max LTV is
allowed for the mother to sell the house to her son.
Under Identity of Interest FHA loans, an arm's length
transaction is indeed allowed.
Peter
Peter, I know what you are saying, however, those times are gone for most.
First, this is not like old times or in the old country where trust is on a hand shake (you know what I mean).
One relative quit claims to another, (assuming the other relative is willing to assume the risk, has the financial capability, etc) to get a new loan, fights start erupting about everthing from tax deductions to whose house is it anyway.
Second, in these times, underwriters will question the file when they see that quit claim deed.
Third, let's face it, if you own a business and not reporting income or over reporting expenses, or something like that, than you should not buy a house anyway. As a matter of fact, the loans that seem to have been created for this type of person seem to be gone.
Bye the way, Fannie and Fredding are suppose to stop purchasing these loans soon. Am I correct? |
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peter
4543 Posts |
Posted - 08/29/2008 : 5:53:47 PM
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Al, there are also gift of equity purchases whereby a SISA parent can
gift 20% of the subject property's equity to an adult child who is a full doc
borrower. Let's say, I owned a house worth $500,000 but I could not refi
because of my lack of qualified income as a retiree on social security payments
only. Then, I decided to sell my house to my son who is a full-doc engineer
who is approved for a purchase loan of $400,000 with 20% down and that 20% down
is a parental gift of equity.
All my son needs to do is to get a no closing cost Heloc in the 1st position
for $400,000 from a retail bank or from Merilyn or Charles Schwab. No closing
costs, and also no title seasoning. My son thus will own the house after
escrow closing and recording and I get the money from the sales proceeds.
Then, after having the money, I could lease back the house from my son or
we both can continue to live together in the same house ever happily together
without remorse.
People are doing this all the time. I have seen this type of transactions
more frequently thean before. It is legitimate and it is pragmatic.
Peter |
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bestbet123
1577 Posts |
Posted - 08/29/2008 : 6:52:33 PM
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That's great providing that you owe nothing on the house.I was under the impression that this thread was for the millions of people who are upsidedown in the current home and mortgage they took maybe 2 -5 years ago.If you owe 500k and want to sell it for 400k,then you would have to negotiate a short sale.They are not impossible , but by no means are they easy.There really is no great solution to the current housing crisis.I have been bashed for wanting to keep DPA's(regulated differently of course)but I would not advocate the SISA 100ltv programs coming back.If you look at the data supplied so far , it is by far the SISA and neg am loans that have killed the industry.I just closed a gift of equity deal on wed.,The parents owed nothing on the home so it was easy.With all the "big brains "here on BO,I think,well hope that we can collectively come up with a solution.Let's start with the way a realtor sets the value of a home.
quote:
Originally posted by peter
Al, there are also gift of equity purchases whereby a SISA parent can
gift 20% of the subject property's equity to an adult child who is a full doc
borrower. Let's say, I owned a house worth $500,000 but I could not refi
because of my lack of qualified income as a retiree on social security payments
only. Then, I decided to sell my house to my son who is a full-doc engineer
who is approved for a purchase loan of $400,000 with 20% down and that 20% down
is a parental gift of equity.
All my son needs to do is to get a no closing cost Heloc in the 1st position
for $400,000 from a retail bank or from Merilyn or Charles Schwab. No closing
costs, and also no title seasoning. My son thus will own the house after
escrow closing and recording and I get the money from the sales proceeds.
Then, after having the money, I could lease back the house from my son or
we both can continue to live together in the same house ever happily together
without remorse.
People are doing this all the time. I have seen this type of transactions
more frequently thean before. It is legitimate and it is pragmatic.
Peter
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HMDApproved
694 Posts |
Posted - 08/29/2008 : 6:58:51 PM
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quote:
Originally posted by bestbet123
That's great providing that you owe nothing on the house.I was under the impression that this thread was for the millions of people who are upsidedown in the current home and mortgage they took maybe 2 -5 years ago.If you owe 500k and want to sell it for 400k,then you would have to negotiate a short sale.They are not impossible , but by no means are they easy.There really is no great solution to the current housing crisis.I have been bashed for wanting to keep DPA's(regulated differently of course)but I would not advocate the SISA 100ltv programs coming back.If you look at the data supplied so far , it is by far the SISA and neg am loans that have killed the industry.I just closed a gift of equity deal on wed.,The parents owed nothing on the home so it was easy.With all the "big brains "here on BO,I think,well hope that we can collectively come up with a solution.Let's start with the way a realtor sets the value of a home.
quote:
Originally posted by peter
Al, there are also gift of equity purchases whereby a SISA parent can
gift 20% of the subject property's equity to an adult child who is a full doc
borrower. Let's say, I owned a house worth $500,000 but I could not refi
because of my lack of qualified income as a retiree on social security payments
only. Then, I decided to sell my house to my son who is a full-doc engineer
who is approved for a purchase loan of $400,000 with 20% down and that 20% down
is a parental gift of equity.
All my son needs to do is to get a no closing cost Heloc in the 1st position
for $400,000 from a retail bank or from Merilyn or Charles Schwab. No closing
costs, and also no title seasoning. My son thus will own the house after
escrow closing and recording and I get the money from the sales proceeds.
Then, after having the money, I could lease back the house from my son or
we both can continue to live together in the same house ever happily together
without remorse.
People are doing this all the time. I have seen this type of transactions
more frequently thean before. It is legitimate and it is pragmatic.
Peter
Alex, we need to get together, how does this weekend look for you? |
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bestbet123
1577 Posts |
Posted - 08/29/2008 : 7:06:04 PM
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Jimmy , what's up bro????
I am cleaning my backyard this weekend , other than that,nada.....call me tomm. on my cell.
quote:
Originally posted by HMDApproved
quote:
Originally posted by bestbet123
That's great providing that you owe nothing on the house.I was under the impression that this thread was for the millions of people who are upsidedown in the current home and mortgage they took maybe 2 -5 years ago.If you owe 500k and want to sell it for 400k,then you would have to negotiate a short sale.They are not impossible , but by no means are they easy.There really is no great solution to the current housing crisis.I have been bashed for wanting to keep DPA's(regulated differently of course)but I would not advocate the SISA 100ltv programs coming back.If you look at the data supplied so far , it is by far the SISA and neg am loans that have killed the industry.I just closed a gift of equity deal on wed.,The parents owed nothing on the home so it was easy.With all the "big brains "here on BO,I think,well hope that we can collectively come up with a solution.Let's start with the way a realtor sets the value of a home.
quote:
Originally posted by peter
Al, there are also gift of equity purchases whereby a SISA parent can
gift 20% of the subject property's equity to an adult child who is a full doc
borrower. Let's say, I owned a house worth $500,000 but I could not refi
because of my lack of qualified income as a retiree on social security payments
only. Then, I decided to sell my house to my son who is a full-doc engineer
who is approved for a purchase loan of $400,000 with 20% down and that 20% down
is a parental gift of equity.
All my son needs to do is to get a no closing cost Heloc in the 1st position
for $400,000 from a retail bank or from Merilyn or Charles Schwab. No closing
costs, and also no title seasoning. My son thus will own the house after
escrow closing and recording and I get the money from the sales proceeds.
Then, after having the money, I could lease back the house from my son or
we both can continue to live together in the same house ever happily together
without remorse.
People are doing this all the time. I have seen this type of transactions
more frequently thean before. It is legitimate and it is pragmatic.
Peter
Alex, we need to get together, how does this weekend look for you?
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clearwaterny
347 Posts |
Posted - 08/29/2008 : 10:17:06 PM
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Do you honestly believe what you're saying. I highly doubt that the government will lower the tax rates if they have s/e people report all there taxes. in addition, so you're saying that if a s/e borrower has to pay for his goods upfront he shouldn't be able to deduct it from his taxes later? if i'm going to be paying for my marketing material, leads, rent, etc I shouldn't be able to deduct it from my taxes? man, you have to much faith in the system.quote:
Originally posted by hulkfunding
Self-employed borrowers will have virtually no choice but to start reporting more income on their tax returns immediately. After two years they can try to get into a full doc loan, assuming that they legitimately show enough income to DTI.
The system needs to purge, and in the future everyone should have to qualify full doc. Perhaps this will help keep federal income tax rates down as the overall tax revenues might increase significantly when more S/E people start to pay their fair share.
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hulkfunding
108 Posts |
Posted - 08/31/2008 : 9:31:00 PM
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Of course a S/E person should be able to deduct expenses; that's the way it is & should be.
However, a successful S/E borrower with a good business should not need a stated income product as long as they accurately/honestly report the correct non-adjusted gross income. Even with all deductions/expenses the business should generate enough income to qualify. They should have to qualify based on their income - expenses; period. Sounds simple to me...
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