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Author Topic: IS THIS TRUE.....  (Read 4065 times)

Offline aatikajerry

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IS THIS TRUE.....
« on: April 27, 2006, 08:23:00 am »
Hello Everyone i reside  and a new investor in the State of GA, i was told from a lender that if i rehab a home and sell it let's say within six months the buyer's lender would look at it fishy or a risky property. What i am wondering is, does it matter wether the house is being sold in a short period of time will conventional lenders approve of such a house?

Offline kdhastedt

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Re:IS THIS TRUE.....
« Reply #1 on: April 27, 2006, 08:35:26 am »

This runs into the area of "title seasoning".

Take before and after pictures and keep records of materials, work performed, etc.  Unless you're really shafting someone, you should have no issues.  I do this all the time.  I buy cash, rehab, and refinance...I've never had a question about why I paid $XX thre months ago and now want $YY.  

The issue is when cooked people (lenders, appraisers, etc.) are in cahoots to commit loan fraud.  This is illegal.

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline aatikajerry

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Re:IS THIS TRUE.....
« Reply #2 on: April 27, 2006, 08:40:36 am »
Thank you for your reply, i was wondering  without financing and after renovating the home can you just place it on the market let's say within a month, will a conventional lender look at that fishy?

Offline kdhastedt

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Re:IS THIS TRUE.....
« Reply #3 on: April 27, 2006, 09:11:56 am »

Perhaps...depends on the circumstances surroundin hte acquisition and sale.  Sometimes, you just find good bargains.

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline Mdhaas

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Re:IS THIS TRUE.....
« Reply #4 on: April 27, 2006, 02:35:51 pm »
Conventional lenders do not usually see the title on the property before hand.  This means that if you have great credit and the loan parameters are conforming then you should not have an issue.

On the other hand, subprime lenders always want to see the title.  There are lenders that do not reuirte seasoning.  However, the rate will be high and parameters are tight.
If at first you don't succeed.....................skydiving is not for you

Offline Aithne

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Re:IS THIS TRUE.....
« Reply #5 on: April 27, 2006, 09:09:06 pm »
Sorry Md but that's wrong.  I'm a mortgage underwriter and every lender (except perhaps private ones) ALWAYS look at title, will not close without title.  Can't close without title.  How else will they know that they are securing the position they think they are?  Also, most lenders require appraisals and all appraisals require a three year sales history.  If you bought it as a distressed sale simply have the appraiser document that.  We are very well aware of legal flipping, know it's profitable (some of us even do it  ;) ) and we understand how properties can increase in value in a short period of time.  Make sure you don't overimprove your property.  What I mean by that is don't try to make a $150,000 house sell in a $100,000 neighborhood.  You won't find comps in the area to support it, and we'll question that.  Be sure your appraiser makes the very simple statement like "previous sale was a distress sale or property bought under market value and refurbished, etc.  If you tell us why, we're fine with it.  If you try to make us guess, we'll ask.

If you try to slip it under the radar. you may succeed a time or two, but not always.  And when it is caught it makes everything else about that file suspect.  It's when we see simple things like that, we start picking through the file with a fine tooth comb.  Calling to verify funds on a VOD, reverifying VOE's.  Just put the simple explanations there understanding most underwriters will catch those and if you've given us an explanation up front, we have no reason to assume anything else.
« Last Edit: April 27, 2006, 09:13:47 pm by Aithne »

 




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