As an attorney, you encounter many scenarios where property is involved in a lawsuit. Having access to private banking portfolio loan programs (that are not under Fannie/Freddie underwriting guidelines) gives you options where most other lenders have none. We bring new meaning to common sense underwriting because we have the freedom and flexibility to make unorthodox exceptions and entirely disregard Fannie Mae guidelines. In fact, there are very few instances where I cannot secure financing for a borrower, whether there is credit issues, title issues, income issues or property issues. Divorce is not finalized yet? Often times we can use the unofficial divorce decree to underwrite the new loan.
Below are examples of loan programs we can offer your clients…
The house must be refinanced to take one spouse off the note/deed and current loan. However, the spouse that is keeping the house, does not qualify due to inadequate income. We might be able to use a program called Asset Depletion where the Underwriter uses liquid assets as a source for more qualifying income on the application. Simply put, a borrower with assets has a fantastic chance of qualifying for a loan with us whereas most other financial institutions would deny the loan. Moreover, this program is especially great for self employed clients, wealthy and trust-fund clients.
EXAMPLE:
Deficient Income Relief – Borrower’s income is $5,000/month, but his debt-to-inocme (DTI) is too high to qualify with most lending institutions. However, the borrower has $1,000,000 in “liquid” assets. Using Asset Depletion, we simply give the borrower a rate of return on their assets to provide more qualifying income. In this case, the borrower would realize an additional $5,846 a month tfor qualifying purposes. As a result, this borrower has their existing income of $5,000 plus the Asset Depletion income of $5,846 resulting in qualifying income of $10,846 a month. This resolves the DTI issue and the borrower is approved for a loan.
In addition, we have a long list of nontraditional underwriting tools to provide DTI relief where other lenders would fall short. In a nutshell, if a borrower has assets, income relief is readily available.
Vesting Title in Entities – Unlike most lending institutions, we can vest title in the name of an entity, such as a corporation, trust or partnership, which is useful for borrowers wishing to keep their name out of the public records.
Self Employed less than 2 Years – If your borrower is self-employed for less than two years, most lenders will summarily deny a loan because of Fannie Mae guidelines. However, we have no specific rules with respect to the length of time a borrower is self-employed. Rather, we look at the entire loan profile to determine if the risk is reasonable.
Business Funds – Use for Downpayment or Reserves – Business Accounts are an acceptable source of funds provided a signed letter from the Borrower’s CPA is included in the loan file which attests (1) the borrower can access the funds, and (2) withdrawal of funds from that account will not negatively impact the daily operations of the business. Guidelines say no more than 33% of the total assets may be used for down payment, but we make exceptions to this to 100% regularly. However, only 33% of the remaining balance of assets may be used for closing costs and/or reserves. The borrower must be at least 50% owner of the business and available assets will be limited to his/her percentage of ownership in the business.
Upside Down Refi – Use our Pledged Assets Program – Many borrowers have a home that has little equity or is upside-down. They’d love to refinance but with no equity, the only way to get the loan done is to pay down the mortgage. What if you could offer the borrower a program where they could use their assets as collateral for the loan instead of spending all their savings and liquidating their assets to pay the mortgage down? After all, the property is probably not going to appreciate for quite some time, and in fact will probably continue to depreciate in the near future. Moreover, if they liquidate their assets to pay down the mortgage, then they would be subject to a hefty capital gains tax, and, they would be pulling their assets out of an income bearing vehicle. We allow the borrower to “pledge” their assets to make up for needed LTV. This way the borrower can refinance into more reasonable terms and still keep their assets where they can continue to work for them.
Pledged Asset Program – Many borrowers have accumulated assets in the form of stocks, bonds, mutual funds, etc. However, in order to purchase or refinance the home, they would have to liquidate those assets for the down payment. What if you could offer the borrower a program where they could use their assets as collateral for the loan without having to liquidate? After all, if they liquidate their assets, they would be subject to a hefty capital gains tax, and, they would be pulling their assets out of an income bearing vehicle. We allow the borrower to “pledge” their assets in lieu of down payment (or LTV for a refinance). This way the borrower can keep their assets where they can continue to work for them. With Pledged Assets, we will lend up to $5,000,000 or more at 90% LTV with no mortgage insurance! Click here to learn more about the Pledged Asset Program
Cash Recapture – NO 6 MO. WAITING PERIOD! – (This could come in handy during a divorce or when money is needed quick)
This is a very popular program for many borrowers right now. About 1/3 of all homes, these days, are bought with 100% cash. There are a couple different reasons for this strategy, but the issue I am concerned with is the loss of liquidity for your client. Fannie Mae and Freddie Mac require 6 months from the date of purchase before cash may be taken out of the property. We do not. To combat this, we have two different cash recapture programs to offer your clients.
1. Following a recent purchase we have no 6 month seasoning requirement like Fannie/Freddie does. The loan is priced as a non cash-out refinance and is available on a 5 or 7 year ARM. Click here to learn more about this particular csah recapture program
2. The Home Ownership Accelerator Loan (All-in-One Loan). Please click here to be taken to my website for this particular loan and please let me know if you have any questions at all about this incredible loan product.
As a large private mortgage banker, we have access to virtually every single loan product on the market today. Please click here for the complete list of all loan programs I can assist your clients with. And please let me know if you have any questions or if I can help any one of your clients through a difficult time. Their situation will be handled with the utmost care and confidentiality by my team and myself.
