Fannie May/Freddie Mac Loans

[Ugin Rapoport]

Hello,

When it comes to financing real estate with Fannie Mae/Freddie Mac Loans, I am seeing basically the same applications from different lenders.

I assume that is because the lenders are simply following the specific guidelines set by Fannie Mae and Freddie Mac. The lender will then sell the loan off to a different institution as far as serving.

With that being said, what criteria should I look for when selecting one lender from another for the Fannie Mae/Freddie Mac Loans?

[Frank Chin]

@Ugin Rapoport

Most of the major banks making home loans in my area sell their loans to Fannie Mae/Freddie Mac Loans. However, there could be subtle differences how they consider the application, such factors as DTI issues.

At the bottom of the market in 1993, I submitted 2 loans I obtained in the mid 80's. totaling $300K, at interest rates exceeding 13%. In 1993, rates dropped to 7.5%. I submitted 2 loans for refi.

One was approved relatively quickly, within a month. The 2nd one where I co-owned the property with my mother in law, they were hemming and hawing for over 2 months, asking for my more info from my MIL. She's retired, and the loan was based on my income only for DTI calculations. Problem was my MIL invested with us in two properties, and two others with my brother in law who's a doctor. Then my BIL did some investing with other doctors. Just with my MIL, BIL we owned over 7 properties at the time. The bank wanted my BIL's info, and I asked them if they further need those of his fellow doctor investors, and they say they might. This was going on now into 3 months. How many people will they finally analyze?

At the time, I had what today is called "private wealth banking" with Citibank, whom I did not apply to. I had a meeting with my Citi banker on something else when I mentioned the problem. The banker looked at me, and said "we can do it". I was going though hoops with the S&L, so I said "if your bank is selling the loan, and have to follow loan buyer protocols, wouldn't you run into the same problems? He said "no". He said Fannie and Freddie/Mac aren't the only loan buyers out there. In my mind, that's their problem, not mine.

He said he'll instruct the loan processing dept. to only consider our credit for the application. My MIL's name will be on the mortgage but unlike the S&L. my MIL, BIL. BIL's fellow investors will be out of the picture. True to his word, the loan was approved within a month. The only problem is, I paid for 2 application fees, and other duplicate fees, such as appraisals as I had 2 loans in process. But with $300K in loans at the time, a reduction of 6% would only take me a month to make the money back.

That was years ago, and  currently,  I have private banking accounts at two different banks.