Hi there. My name is Mike Koch and I’m a real estate investor looking to educate myself on all of the different ways of financing properties. Here are just a few questions: What will kill a loan? What programs require little or no down payment? What credit can be fixed and what can’t? What will the lender want fixed before closing? Who will let me take back a second and who won’t? And any other advice would be awesome. Perhaps you could direct to some other sources of info. Thanks a ton guys.
What will kill a loan:
-Lies on the application.
-A blown out appraisal.
-A credit score is marginal and then DROPS during the loan process
-No cash assets (Try to have ATLEAST 2 months PITI in checking/savings)
Downpayment:
-Depends on credit/assets
-0% is very common right now.
Credit:
-Depends on the lender.
-Mortgage lates, foreclosures and BKS can’t be “fixed”…time must go by.
-Most lenders will allow a certain amount of collections/late payments.
-Paying off old collections can hurt you credit in the short-term.
I’m the king of short and to the point answers…or as some say half-A$$ replies.
LOL…True story…
I was processing a loan a few months back for another loan officer and his borrower lied about his employment…had an inside person in the HR department, the whole deal. Well, the lender called behind me to verify the VOE that I conducted and got ahold of the director of HR and the Director says, “No. That person was fired two months ago.” Lender calls me and says this is a fraudulent VOE and your names on it. I’m like, “No. We’ve got a fraudulent borrower I reported what I was told by the HR assistant.”
Well, this week I get a letter from corporate saying they want a written explanation of what went on. I wrote back…“The borrower Mr. ^&^& was a liar and got caught. I informed the loan officer and branch manager of this and have had nothing to do with the file since.”
So, they come back and say, “…this letter is not going to cut it we want a more detailed explanation” To which I said, “Look I was not the loan officer on this file and I did my job as a processer as a contract employee and was never paid. You want a detailed letter and I want to get paid $5.00 if I’m going to write one up.”
They got thier letter of explanation and yesterday I had my lunch on the company… 8)
MORAL OF THE STORY(maybe there is no moral but I like to tell it anyway)… Details will cost ya.
That is an interesting story Patrick, I have a great appreciation for it being one of the folks that have solicited those explanations from brokers and bankers on loans that have gone wrong.
I’ll add this, in a broader context ,to your earlier thoughts:
It is the data in a file that makes it work. The integrity of the data is paramount to the success of the file. The quickest thing that will make a loan not work is undermining the integrity of that data. Anyone that thinks it is hard to confirm the information on an application and the accuracy of documents, whether you have collusion inside banks, title companies, appraisal firms or employers is saddly mistaken.
Misrepresenting data will eventually come back and bite you and when it does, it can bite pretty hard.
