All Forum Posts by: Ed Wood

@Paul Alberry

Yes he could but if the buyer needed conventional financing it would need to be taken out of the LLC to fund.

@Steven Hamilton II

SFR - 4 unit conventional mortgage its entirely true and no personal guarantees accepted.

However there is one exception for owner occupied property they will allow the borrower to fund into a trust only.

@Mehran Kamari

TL;DR market was hot, now stalled, first couple weeks January let us know how the market will proceed.

Nov and Dec we've seen a huge pull back in Orange county. So much so over the summer we would list a property on Friday and have 10 offers Monday, if we did a open house we'd have literally 60 people through. To contrast that I did a open house first part of March and had 12 people.

We also have a real estate store in Orange and usually get 1 buyer walk in per day and that went to one in 2 weeks.

In my opinion what caused this stall is frustrated buyers tired of competing for properties and sellers who reached too high in pricing their property resulting in a stall. We experienced this first hand from our buyer pool and sellers wanting to list their properties high.

Price drops out weigh price increases these days BUT we are in the holiday season so first 2 weeks in Jan I think will answer a lot of these market questions ESPECIALLY after Jan 10 when further mortgage restrictions kick in.

What story changed with the landlord? What are you particular piece of information from the estoppel are you looking for? Property condition, tenant history, gross income?

If it is income I'm guessing there are a few ways to verify this I like having a few sources so I can verify the information.

1. Lease agreements. Besides the income on the lease agreements you'll looking at who is on the lease vs who is living there, you also verify that there are no potential remembrances written in the lease verbage, extreme scenario but what if one of the leases has a lease option clause.

2. Knock on the door and have a casual conversation.

3. For income you can ask for a copy of the sellers most recent 2 years schedule E's provided by his CPA. And if you still don't believe that you can as the seller to sign a 4506T and pull the transcripts from the IRS.

A few things you want to know besides income I've found are things that will effect returning the deposit. Things like how old the carpet is (effects what you can withhold for carpet when returning the deposit) and the property condition when the tenants moved in.

Here's what happens. The fraud committed is called "occupancy fraud" for some reason a lot people in general think it's ok to do this not knowing how serious this is.

As the loan is sold up the chain there are several QC checks and if there is any hint of fraud in the file a SARS report is file on the borrower with the DOJ. For occupancy they can look at last 2 years tax returns from the 4506T form the borrower signed, they can pull nationally any properties owned by the borrower and spot check for tax billing vs property addresses and other methods. There is no notification when when a SARS report is filed on a borrower.

If there is indication of occupancy fraud the investor who purchased the mortgage has a PI firm AKA 'mortgage investigator' go out to the property knock on the door and they ask questions like, "are you?" "oh, how long have you lived here", "are you a tenant" things like that fishing for a answer that confirms the the owner does not live in the property.

When the PI files the report the loan starts to unwind and reps and warranties kick in this means the originating lender, bank or broker must pay buy the loan back and at this point the borrower is probably notified and the loan is called due and payable immediately. Now whether the authorities get involved further is a different matter. I would think authorities getting involved would be dependent on their current case load, and how many SARS reports were filed on the borrower for the same incidence. It could take years for them to do anything.

I'm surprised the underwriters did not catch his actions if the borrower has done this several times. Underwriters look for rapid acquisition of properties from a nationwide title search, they double check address and if there are any discrepancies the borrower needs to write a letter of explanation on title and the credit report as well as other methods.

Llenders will not fund a conventional loan in a LLC, Trust, Partnership or Corp. The property will need to be in your name to qualify and close.

Yes you can do this. They buyer must disclose the liability to their lender also the underwriter will want to know the loan terms. Fairly simple really.

I'd change agents sounds like you're getting blow-off. Some agents don't know how to qualify buyers and if nothing happens they blow buyers off out of fustration it's their fault not yours. A good agent will qualify buyers before driving them around. Proof up with a good agent or work with a couple of them until you find a good one.

Depends if the MLS reciprocates with your local MLS. For example we have a few MLS systems in So Cal and most share data through the CARETS system HOWEVER some local MLS's do not. For example San Diego, Big Bear and Victor Valley. So if we have a listing in any of these areas we have to pay extra or join their board to list the property in the local MLS.

In California our listing agreement actually discloses this by saying something like this going by memory, "your local MLS is ___________, the MLS your property will be listed in is _______. "

So check your listing agreement first? Then call the flat fee broker and ask, they should be honest with you or you can contact the MLS your property is in and ask them.

Problem is the loan amount is soooooo small it's effecting the rate so the lender can make some money.