All Forum Posts by: Patrick Roberts

I'm not going to be able to help you there. In the US, for Conventional loans, we can sometimes get the borrower on a payment plan and treat the plan as debt for DTI as long as certain conditions are met. I have no idea how the Canadian side works. I wasnt sure if CRA was some local/state agency in the US.

CRA as in Canada Revenue Agency? 

I'm not aware of any lenders who do this. Generally, the economics of lending do not support these loan amounts.

This is accurate. Nearly every DSCR loan I'm aware of requires a PG, which obligates you on the debt. One of the questions you will be asked on the URLA for any conventional/govt loan is something to the effect of "are you responsible for any debts that are not already disclosed (meaning discussed or on your credit report)?" Lying about this is fraud. Also, any competent underwriter who sees a property connected to you or your entity is going to inquire about it, whether through tax returns, corelogic, etc.

Would anyone have any interest in a monthly breakfast/coffee meetup for private lenders and those buying/investing in notes? I'm kicking around the idea and wanted to gauge interest. Any input is appreciated. 

Patrick

Rates have come down a little in the past few weeks. Also, its very possible the bank has a buydown in box A masquerading as some other fees. Lastly, it could be that the bank is going to portfolio your loan at below-market pricing because they want the entire banking relationship (deposits, transaction processing, consumer lending, etc) or simply want the risk (yield).

Lots of local and regional banks have been retaining loans at really aggressive pricing recently as the current environment makes this favorable for them. However, the intrinsic cost of this "sweetheart deal" is dealing with a small bank underwrite. In my experience, traditional banks tend to have pathetic mortgage lending competence because they haven't invested or cared about this vertical in over a decade. Your experience could range from average to horrifying. 

If you want to quantify the intrinsic costs, ask your preferred non-bank lender to quote a buydown to 6.5%. This is the $ cost of not dealing with a potentially incompetent local bank mortgage process. The question then becomes this - is the $ cost worth the dependability and quality you expect to receive from the non-bank lender. 

Most people quit claim the deed to an LLC after closing on the loan. Just know that if there is a Due on Sale clause in the mortgage (99.9% of loans will have them), the note holder could theoretically call the loan due. Rarely happens, but it's a potential outcome.

No lender can run a formal credit inquiry (hard pull) for the extension of credit without an application for credit. Either A) the gf's mother stole her identity and impersonated her on the loan application, B) she's lying to you and is going along with it, or C) the inquiry is unrelated to the mother's loan. This all assumes that the inquiry is related to the application by the mother for a loan and that what you're seeing on the report is actually a formal inquiry. 

If this is a formal inquiry that she did not authorize, you're going to have a mess on your hands. I doubt the bureaus will remove the inquiry without a police report for identity theft, and the lender who made the inquiry is likely to have an equally bad response. Any new loan will most probably condition for an explanation for the inquiry; my guess is this wont go over well with the new lender. 

For the 2nd half of your question, there's a lot that is unknown and only an attorney will be able to tell you. 

I hate to tell you this, but it's definitely lawyer time. Identity theft is no joke and could literally wreck your gf's finances. 

This is a bad idea. My brief understanding of the licensing laws regarding debt collection in a couple states is that not being licensed could prevent you from enforcing the debt, but I'm not an expert here. You'd basically be unsecured, and the only true way mitigate risk on unsecured debt is diversification. You'll be completely concentrated in one asset. You'd be better off just investing in one of the many note funds rather than straight-up gambling for a couple hundred extra bps. 

In the general environment right now, state regulators are looking for every excuse to go after "real estate investors". Just look at the myriad of laws, regulations, and bans passed or proposed for seller financing, wholesaling, and lending in the past two years. If caught, best case scenario is you'd get a cease and desist letter from the state regulator and probably fined. 0% chance this is worth it. If a license is required and you don't want to be licensed, do business in another state. 

A final point - foreclosing is generally a legal process involving attorneys. I suspect you'll have a hard time getting an attorney to assist you in an activity you're engaging in illegally. The is the basis that SC is using to go after wholesalers at the moment - passing a "ban" that's murky at best and then daring the attorneys to test it.

If you have the income to support DTI requirements, Conventional investment products will provide the best deals. If not, DSCR would likely be your best bet. Every DSCR lender will have their own overlays for condos. Also, with DSCRs, you will not be able to use the property for personal use at all. If you plan to ever make personal use of it (as in staying in it on your own vacation), look at financing for 2nd homes.