All Forum Posts by: Nicholas Romero

 Yeah, this is the only thing that makes sense to me. I'm just confused as to why they won't just say that they have additional overlays. 

It's also incredibly poor form to have no mention of that policy until all the documents were signed and sent off. We have 6 mortgages with them, but I'm afraid this has killed our relationship since I'm not sure how much I can rely on them.

Thanks for the replies.

@Harjeet and @Russell

Business is functioning as usual. There was a 20% dip in revenue initially but that has recovered immediately. I offered to provide documentation showing this, but the lender refused to even review it. It seems even if you've taken $1 of the PPP money, it could hinder your ability to close.

I received a precautionary PPP loan for my small business and it seems like it's causing me issues when trying to complete a cash-out refinance on one of my homes. It happened about as last minute as possible - I had signed all closing docs with a notary and was just waiting for the loan to fund. The lender's rationale for canceling was due to Fannie/Freddie guidance on loans where self employed borrowers apply for any Covid relief assistance for their businesses. Apparently receiving assistance is considered a request for financial help and will disqualify you for a mortgage. I tried digging to find where exactly something like this was issued, but the below was all I found. Has anyone else run into issues with this?

https://selling-guide.fanniemae.com/Content-Management-Labels/Guide-FM-com/1799667111/COVID-19-FAQs-Underwriting-General-05-05-2020.htm

1. Does the lender need to consider a Paycheck Protection Program (PPP) loan when analyzing a self-employed borrower? NEW

The PPP is a loan issued by Small Business Administration lenders under the CARES Act. These loans are designed to provide a direct incentive for small businesses to keep their workers on the payroll. The existence of a PPP loan could be helpful information in analyzing the borrower's business. Lenders should apply due diligence and review the actions of the business and any impact the current situation has taken on the flow of income.

1. Does the lender need to consider a Paycheck Protection Program (PPP) loan in the borrower’s DTI? NEW

Under the CARES Act, PPP loan terms allow deferred payments for a specified period, no personal loan guarantee, and the potential for all or some portion of the loan to be forgiven. Therefore, no payments would be expected to be included in the borrower’s liabilities at this time. Once it has been determined that any portion of the PPP loan must be repaid, follow the Selling Guide requirements for loans paid by a business.

It's actually a common misconception that you have to wait until 59 1/2 to access those funds. You can take advantage of a little known IRS rule called 72t which allows you to withdraw early if you're looking for early retirement. 

http://www.gcbaonline.com/retirement/understanding-irs-72t-withdraws-rule-calculator