Home Loan Programs With A Prior Short Sale Or Bankruptcy

[Erik Sandstrom]

You may be stuck in a situation where you’ve been denied by your current lender because you have enough of a down payment but they are unable to get you a conventional or government loan. I’m going to breakdown one of our newest products available to see if you may qualify. The terms available on these types of loans can vary depending on the length of time between the economic event, credit score and down payment. I’m not going to get into pricing in this article but I can say that it is much lower than hard money interest rates and costs.

The goal for these products is mainly short term, however can also be designed for long-term as well.

Questions I ask when determining whether or not a portfolio loan makes sense:

• How long are you going to have the loan before you can refinance?
• What is the payment difference between a regular conventional loan and a portfolio loan?
• How much is it to rent a similar property?
• Are the homes in your area appreciating?

These questions will help determine if this is a worthwhile direction in either short term or long term. Short term is fantastic as there really aren’t any outside the norm costs on these loans to get them like a large amount of points as typical mortgage brokers or private money lenders would charge.

Program Details:

• 10% minimum required for 2 years out of foreclosure, bankruptcy, DIL
• 10% down no minimum required time for short sale
• 15% minimum required for day after foreclosure

Credit Score & Reserve Requirements:

• 660 – 15% down, 6 months of reserves post-closing
• 620 – 20% down, 3 months of reserves post-closing
• 580 – 30% down, 3 months of reserves post-closing

Max loan size – 1,000,000.00

Loans on properties in New York & Maine only eligible for 2nd homes and MA properties not eligible.
This program will allow for a myriad of problems that a borrower had in the past and it’s almost too much to say in a short article. I have had borrowers approved that have a charged off 2nd mortgage, foreclosures on multiple properties, short sales not seasoned 4 years for conventional and loan limits too low for FHA.

You cannot combine a bank statement loan or stated income loan with this program. You must be able to provide proof of income and that you have recovered from the event. If all you have is a foreclosure in the past you would be a fantastic candidate for this.

When it comes to niche/outside the box type financing there isn’t just one bucket you want to have available. It’s crucial to have options for people and understanding which one would suit the borrowers best depending upon the situation. More info: [email protected]

 

[troubleinriverside]

You may be stuck in a situation where you’ve been denied by your current lender because you have enough of a down payment but they are unable to get you a conventional or government loan. I’m going to breakdown one of our newest products available to see if you may qualify. The terms available on these types of loans can vary depending on the length of time between the economic event, credit score and down payment. I’m not going to get into pricing in this article but I can say that it is much lower than hard money interest rates and costs.

The goal for these products is mainly short term, however can also be designed for long-term as well.

Questions I ask when determining whether or not a portfolio loan makes sense:

• How long are you going to have the loan before you can refinance?
• What is the payment difference between a regular conventional loan and a portfolio loan?
• How much is it to rent a similar property?
• Are the homes in your area appreciating?

These questions will help determine if this is a worthwhile direction in either short term or long term. Short term is fantastic as there really aren’t any outside the norm costs on these loans to get them like a large amount of points as typical mortgage brokers or private money lenders would charge.

Program Details:

• 10% minimum required for 2 years out of foreclosure, bankruptcy, DIL
• 10% down no minimum required time for short sale
• 15% minimum required for day after foreclosure

Credit Score & Reserve Requirements:

• 660 – 15% down, 6 months of reserves post-closing
• 620 – 20% down, 3 months of reserves post-closing
• 580 – 30% down, 3 months of reserves post-closing

Max loan size – 1,000,000.00

Loans on properties in New York & Maine only eligible for 2nd homes and MA properties not eligible.
This program will allow for a myriad of problems that a borrower had in the past and it’s almost too much to say in a short article. I have had borrowers approved that have a charged off 2nd mortgage, foreclosures on multiple properties, short sales not seasoned 4 years for conventional and loan limits too low for FHA.

You cannot combine a bank statement loan or stated income loan with this program. You must be able to provide proof of income and that you have recovered from the event. If all you have is a foreclosure in the past you would be a fantastic candidate for this.

When it comes to niche/outside the box type financing there isn’t just one bucket you want to have available. It’s crucial to have options for people and understanding which one would suit the borrowers best depending upon the situation. More info: [email protected]

 

[troubleinriverside]

Hello,

I have been a member here for quite a while and been sitting tight waiting for a solution. here is my situation;

8 years since bankruptcy discharge
1st mortgage with CitiMortgage Bal $380,000 10 yr in only elapsed, Loan originated in 2005, variable currently at 4.35% (6 month Libor)
2nd mortgage $250K discharged in BK and loan written off. However HSBC seems to have lost the note as they cant seem to find it amongst the thousands of defaulted 2nds from during the great recession. so a Lein remains

The property should appraise around $700,000 and its appreciating
credit score 600-660 (who knows ? each bank is different)
No adverse events on credit since bankruptcy.


I'm looking for a final solution because I'm 61 and planning to retire in a couple of years. but I want to clean this up before I do.

Thanks for any advice

 

[Erik Sandstrom]

Hey Bud,
Of course I know who you are, very active member on the forum and we appreciate that greatly.

I do know what I would be able to accomplish if you were seeking another property, not necessarily on the actual subject property. The 2nd is of course the big question/what if right...our programs we have right now allow for a 2nd mortgage on a prior foreclosed property. There are two different categories it would fall in, one if its below 25K and another if it's above 25,001+.

The program that is out that is above the 25,001 on a charged off 2nd lien isn't very friendly when it comes to interest rates in comparison to what you have on the 1st mortgage currently. I've seen around 7.75 - 8.5% depending on the credit score and/or equity position. We call this program the worst of the bunch (typically no points).

This again is on a purchase of a property that is different than the one that carried the 2nd lien. Since your property has the lien, my guess is it would revert to first position and therefore have to be paid off with the refinance. Not only would you be paying a higher rate on the 1st mortgage but you would also be combining the two together.

Before I ask my underwriters about this scenario would this be something you would even be interested in, given your current situation?