All Forum Posts by: Patrick Roberts

Hey Evan,

I live in Charleston, and my office is out of Columbia. I'm fairly active in both markets. Happy to connect!

Do you plan to hold the bond for deed, or sell it?

Lawyer time. If this is in fact a VA loan, the performance on it will affect your CoE so long as that loan is tied to your CoE. This could have an impact on your ability to get another VA loan in the future. This is also going to destroy your credit. I would not waste time on this - take action immediately.

Might not hurt to call the servicer and see if some kind of forbearance program is available to pause payments until the divorce is resolved so that the mortgage lates dont wreck your credit. 

My guess is that Title is preparing the DOT for the lender and needs the terms from the note. Could also be that they need the terms for the title commitment.

As far as required documents goes, this will vary by lender and the level of sophistication. At a bare minimum, there should be a note, deed of trust, hazard insurance policy with mortgagee clause either paid at closing or verified as paid up and in good standing, lender's title policy. 

Most lender's who know what theyre doing are going to require at least the following (just off the top of my head):

- tax certification from Title and/or payment of taxes at closing

- copy of valid identification and affidavit of any AKAs

- affidavit of non-owner occupancy/business purpose use

- borrower auth and certifications to release and verify

- pledge/collateralization of leases/rents

- copy of Title/attorney E&O insurance

- if an entity holds title/is the borrower, then: personal guarantee, articles of org/incorp, certificate of existence/good standing, operating agreement, corporate resolution to authorize borrowing if there is more than one member, possibly a UCC1

Are you the lender or the borrower in this situation? It's the lender's responsibility to provide the note, the mortgage/DOT, and any other documents that may be required. The lender should be sending over a package containing all of the prepared documents, along with instructions on what needs to be executed, as well as reviewing for effective execution prior to wiring/releasing funds. I would not rely on Title to draft these or to advise on title commitment/title policy as Title typically represents the insurer. I dont know CA's rules and customs, but my experience is that the Title/Closing attorney does not represent the lender's interests. If they botch something, it's the lender's problem to deal with.

Another thing, if the lender doesnt provide written closing instructions, the closing protection letter goes out the window. I believe not having written instructions has some impact on the lender's ability to go after the attorney/title company if get jack up the closing, as well, but I'm not 100% on this. My understanding is that if the closing instructions are followed, then the lender has no recourse against Title/E&O claims for any mishaps that result from Title following the directions. This is not a generic form I'd pull from a random source.

Interesting. Typically nonrecourse debt caps around 55-60% LTV. This is the first lender I've heard of going to 70%.

Baton Rouge has a decent REI meetup every month on the first Tuesday. It's called Red Stick REI. Not sure where youre located, but if youre nearby, it's worth attending. I believe Title-2-Land also hosts a monthly meetup call the RING or something like that. I know Nola has a few decent meetups, but I've never attended any of them. I stay focused on the BR area as far as Louisiana goes.

I'm assuming this a second position loan against the equity in your primary home. If so, then most lenders are at WSJ Prime + a spread on these types of loans right now. Whether this is a line of credit vs a closed-end loan, the tenor of the loan, your FICO, and the CLTV on the property will all impact your rate. 9.8% is probably a little high, but if your FICO is below 700, then this is likely on target.

For reference, WSJ Prime is 7.5% as of this morning. 

If this is first position and the property is currently free and clear, you'll be much better off with cashout refinance.

Bank statement loans replace your W2 or tax return income with a cashflow calculation based on a 12-24 month history of deposits into your bank account. There is typically an expense ratio applied to this. As an example, if the gross deposits after adjustments over the past 24 months averaged $12k/month, and the expense ratio is 50%, then the lender will treat this as $6k/month in gross income for qualifying. 

Bank statement loans are most commonly used for primary and second home purchases, although this income can be used to purchase rental properties with some lenders. Your personal DTI will still be considered with bank statement loans - it simply replaces your how personal income is calculated.

DSCR loans replace your personal income and personal DTI with the income and DTI (DSCR) specific to only the property for the loan (called the subject property). These loans are only allowed for non-owner occupied rental properties.