All Forum Posts by: Eric Veronica

@Stone Teran appraisals are usually good for 120 days. After that they need to be recertified. 

We will allow transferred appraisals from other lenders however most lenders will not. The lender that ordered the appraisal will have to release the appraisal to the new lender with a transfer letter and a couple additional documents. 

@Account Closed generally banks are not in the business of calling performing notes due.  My guess is that nothing will happen.  If the bank did catch this change it would be more likely that they would require a QCD back in the borrowers name.  Ultimately this depends the lender.  

@Jim D. I have not been on the borrowing side of this scenario however I have been on the bank side. Back in 2008-2010 I had weekly conversations with ballooning loan holders that often ended in tears.  It felt horrible that these people who had never missed a payment and had perfect credit were on the verge of default.  These customers tried to payoff with loans from other banks however no or was lending especially to mom and pop investors on 5 unit properties. 

Most of these scenarios ended with a workout that included pretty ugly terms. Usually cutting the amortization and hiking the rate which often times doubled their payments. 

@Kenny Szymanski I would wait until closing or ask the loan officer if your income would support the new payment. 

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@Jessica Roland have any of the lenders you’ve spoke with given you your current debt to income ratio?  Reason I ask is that you mentioned one property that is not currently rented. If your ratios are close it is possible that a new lease on that property might give you the income needed to qualify. 

@Matt Rusk I would have to agree with your lender.  Occupancy would be a huge red flag unless you can prove that there is a valid reason for the move such as a job change. May also work if the duplex is a higher price, larger square footage, in a better school district etc.

I know I sound like a broken record on these forums but “Occupancy” is not always a black/White issue 

@Mark DeLorenzo I agree with @Chris Mason that ultimately it depends on the appraisal and that can’t be known until you actually pay for the appraisal. 

You may want to task the agent with doing some leg worm. He may be able to use the local MLS to see if he can locate any similar property sales in the last 12 months.

@Sholom Pewzner If you are putting 25% down then the condo should qualify for a limited condo questionnaire.  The limited condo questionnaire does not ask what percentage of the condos are owned by renters vs owners so the issue should be avoided.  

The other potential issue to keep in mind is the single entity concentration.  If one company or individual owns 50% of the units then the condo will be non-warrantable

Below is a link to Fannie's condo questionnaires

short form  https://www.fanniemae.com/content/guide_form/1077....

long form  https://www.fanniemae.com/content/guide_form/1076....

The term "business relationship" could be viewed differently by lenders.  Different banks often have different risk tolerances.  

@Joe Bruck  Arms length is not just blood.  As I mentioned before it is super gray.  

below is right from the Fannie Mae selling guide

Non-Arm's Length Transactions 

Non-arm's length transactions are purchase transactions in which there is a relationship or business affiliation between the seller and the buyer of the property. Fannie Mae allows nonarm’s length transactions for the purchase of existing properties unless specifically forbidden for the particular scenario, such as delayed financing. For the purchase of newly constructed properties, if the borrower has a relationship or business affiliation (any ownership interest, or employment) with the builder, developer, or seller of the property, Fannie Mae will only purchase mortgage loans secured by a principal residence. Fannie Mae will not purchase mortgage loans on newly constructed homes secured by a second home or investment property if the borrower has a relationship or business affiliation with the builder, developer, or seller of the property