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Author Topic: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?  (Read 10056 times)

Offline Investment Loans

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NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« on: December 19, 2007, 05:47:57 pm »
This is NOT an issue related to seasoning.  Rather, this is a topic related to just your standard, full doc, investment, cash out refinance.

Today an announcement came out from a major lender they will no longer be offering "Agency" (just another word for conforming) investment cash out refinances. 

I called to confirm if this was a Fannie Mae change or something they are implementing.  ALL REGS (which is Fannie Mae's published guidelines) does not show any changes.  The lender's underwriter explained it was not Fannie Mae, "yet".   

Sometimes lenders will get word down the pipeline of upcoming Fannie changes.  They'll implement them early on so their systems are all in place when it happens. 

I'll make calls to other lenders and also Fannie Mae this week.

This would obviously be huge.   Think no seaoning cash outs were difficult, if this happens....ouch!

Will keep you all updated.
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Offline Nat_Ferguson

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #1 on: December 26, 2007, 08:58:27 pm »
Please keep us posted

Offline Vacation Condo Guy

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #2 on: December 29, 2007, 12:02:10 am »
the world is a different place than it was a year ago - I'm expecting the mortgage markets to get worse.

I know a lot of investors who did cash outs to re-invest and pretty much just over leveraged everything and are in bad shape now

Offline rookieNYC

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #3 on: December 29, 2007, 01:24:52 pm »
I just met with a mortgage rep from my local branch who is holding mortgages on some of my properties and I didn't get a negative response about this issue..I inquired about doing cash out refinancing on 1 or 2 properties that I own with no mortgages and he was ready to start the paperwork..I then asked if this was *doable* and he looked puzzled by my question and answered "yes why"?...SO others that are in the lending industry please elaborate on this situation because I'm not getting the same information as you are posting here...TY...fwiw my new refi would be a no doc stated income loan...and the mortgage rep knows..
« Last Edit: December 29, 2007, 01:27:01 pm by rookieNYC »

Offline davidcbrewmeister

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #4 on: January 02, 2008, 06:02:16 pm »
Lenders don't "have" to do cash out loans, it's up to them. When I sold RE I worked with a lender that would not do them at all. As a side note, I had very few loans that they would not get done. And some as short as 15 days to close. It may also have been an internal thing due too many bad loans.

Offline REI4ROI

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #5 on: January 05, 2008, 11:06:05 pm »
Hmmm---that's not what I'm seeing (I just did one in IN for an investor last week)...

Regards,

Scott Miller
RE Investment Advisor
Weichert Realtors
[email protected]

Offline rookieNYC

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #6 on: February 14, 2008, 04:14:43 pm »
Well it's official...I just did a cash out  on a 2 family non-owner occuppied property...The loan was a stated income,no doc 30 year @ %5.9...This a property I bought cash and then took a mortgage out on the property...

Point being the banks are still lending !!!!!

Offline christopher w

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #7 on: February 14, 2008, 04:52:50 pm »
The rate and the product are both HIGHLY suspect. I am gonna call a  :bs on that. Especially if it is NOO.
Christopher W
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Offline mcprops

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #8 on: February 14, 2008, 04:53:19 pm »
WOW! Stated @ 5.9% is awesome!

I just refi'd two 2-families full doc @ 7.25%, 80% LTV. Was able to pay off my PML and cash out with most of my initial cash. It was a no seasoning program which I was pleased to find. My mortgage broker told me the stated programs have dried up.

Maybe it's time to explore other financing avenues...

Offline rookieNYC

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #9 on: February 14, 2008, 04:57:37 pm »
lol..Christopher W...

I should add my rate was %6.75 and then after the fed lowered I was notified they would drop my rate further...I also have 4 other properties with this bank that they hold the mortgage on...

I'm still laughing at your post chris....
« Last Edit: February 14, 2008, 05:09:55 pm by rookieNYC »

Offline Investment Loans

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #10 on: February 14, 2008, 05:34:31 pm »
Well it's official...I just did a cash out  on a 2 family non-owner occuppied property...The loan was a stated income,no doc 30 year @ %5.9...This a property I bought cash and then took a mortgage out on the property...

Point being the banks are still lending !!!!!

Which bank?  LTV?


WOW! Stated @ 5.9% is awesome!

I just refi'd two 2-families full doc @ 7.25%, 80% LTV. Was able to pay off my PML and cash out with most of my initial cash. It was a no seasoning program which I was pleased to find. My mortgage broker told me the stated programs have dried up.

Maybe it's time to explore other financing avenues...

I think there may be 1 stated no seasoning lender left.  75% max, no more than 5 financed properties including primary.
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Offline EMG

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #11 on: February 14, 2008, 10:58:42 pm »
I believe this guideline at this point in time is lender specific.

I actually did my due diligence today on investment products as that is my primary source of business. The banks will still do cash out. However, the ltv will be lowered in many of the soft markets. We all knew that though! But 80% cash out for a N/O/O is still available.

Also, anyone that thinks that 5.9% Stated n/o/o was not doable 2 weeks ago...needs to ask themselves if they should be in this business. It is absolutely possible. It's possible today only with a point buydown..even with rates deteriorating.

See you at the top!

Offline rookieNYC

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #12 on: February 15, 2008, 04:09:17 am »
Also, anyone that thinks that 5.9% Stated n/o/o was not doable 2 weeks ago...needs to ask themselves if they should be in this business. It is absolutely possible. It's possible today only with a point buydown..even with rates deteriorating

Thank you....I posted to show others whats available...I will not mention what bank I went through...Do your own due diligence,as I did...

Offline christopher w

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #13 on: February 15, 2008, 08:23:38 am »
To all readers...

Rookie called me and set me straight last night. I stand corrected.
Christopher W
C-214.923.5781

Offline Investment Loans

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Re: NO MORE CASH OUT ON CONFORMING INVESTMENT LOANS?!?!?!?
« Reply #14 on: February 15, 2008, 04:56:43 pm »
I concur that paying points is a viable option to reducing the rate.  I also concur that 'several weeks' ago much lower rates were possible.

A problem with these boards happens when brokers and/or investors post rates.  Readers may immediately think those rates are available for them too.  Most of the time there's too much critical data left off which factors into rate,  ie...ltv, costs, points to buy down rate, when quoted or locked - Just to name a few.

True comparisons can never be made without the right info.

As far as the cash out goes, max full doc, 1-2 unit, less than 10 financed properties is actually 85%.
From the time of this initial post there have been no other major lenders to stop making the cash out loans completely.  Thank goodness.
« Last Edit: February 15, 2008, 05:00:17 pm by Investment Loans »
To Our Success!
Ben Carmona * Consultant * ALL STATES * www.BenCarmona.com * 314-914-6052
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Hard Money Rehab Loans * 24hr/1 day double close funds * Portfolio/Commercial/Business Options * No Seasoning Refis

 




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