That's all well and good for home owners, but what about investment property owners? I'll write some blogs about two situations:
1. A new real estate investor who has two properties purchased on contract who has great credit, W-2 income, but put little money down and has an income level that does not support rental properties without the income from rents. He is trying to get financing for the 3rd time, after being rejected twice.
2. A Real Estate Investor who has held properties for at least 4 years and up to 6 years, has very high credit scores, very high W-2 income, and a lot of cash in the bank. His challenge? He has 11 properties in his name and most have high LTV's.
The New Investor
He has applied at a credit union that said "yes" to the pre-application, and then underwriting turned down the file. He then applied with a portfolio lender that doesn't follow federal guidelines. They said "yes" for two months, and then once again the underwriters said "no."
He is now working with a mortgage bank that has local preliminary underwriting. They have a loan officer that is prepping the file in accordance with the structure of the contract sale and the requirements of the lender. We will make adjustments to the structure of the contract sale to conform with the lending requirements.
The Seasoned Investor with 11 Loans
The 11 loans might kill any kind of refinancing, but we are going to try. He got one loan refinanced with HAMP- a federal loan program. CHASE did that loan and they were outstanding to work with. That one loan will reduced the monthly payment over $400 per month! It makes the property go from break-even to profitable.
Four other loans were rejected by Citibank under the same program. They were a nightmare to work with and ultimately came up with what we considered were excuses. They were incompetent at best. I would never work with Citibank again if I could avoid it.
I'll keep you up to date on both investors. Stay tuned....