All Forum Posts by: Patrick Roberts

Rate will be highly dependent on loan size, credit score, LTV, location, and property type, as well as a few other factors. Even with buying down the rate, I would not expect to get better than low 6's in the best of scenarios. High 6s to mid 7s is more realistic for the most common deals (70%+ LTV).

Also, the FFR doesnt really directly impact mortgage rates. The 5yr and 10yr treasuries are better barometers. Same goes for the MBS market.

Very normal. It's a moratorium due to the disaster. Once the disaster is over, someone from the lender will verify the structure wasnt damaged and then proceed with the funding. Happens just about every year in the Southeast with hurricanes- I usually spend the day after the storm driving around taking pics or coordinating inspections of properties so that my borrowers can close.  Changing lenders wont help - this will be the case for almost every lender.

Call your insurance company and confirm that a binder is in place for your insurance for this deal. If not, you may have bigger problems than the funding moratorium.

If it's salaried W2 with an arms-length employer and you have at least two years of work history, then this will be the best for conforming loans. If you're W2 but hourly and "variable", meaning you don't consistently work the same fulltime hours each week, then you'll still have to average income over the past two years and may not qualify at all, depending on the circumstances.

What will not work is using an S Corp to pay yourself via W2. If you own 25%+ of the business paying your w2, youre still self-employed.

There are bank statement/1099 loan program as well, which is what you have been offered. These are NonQM loans that underwrite by using the gross cashflow (as evidenced by net deposits in your bank account or how much was reported on your 1099) and then applying an expense ratio (usually 30-70%) to determine your gross income. These programs usually come with 1-3 points up front, requirements of at least 10% down, and rates that are usually 50bps or more above conforming loans. Theyre great products for self employed borrowers who will not qualify for traditional loans, but there's a premium for that convenience.

 Yup, this is exactly the reason that I wouldnt allow delegated correspondent - it's too easy to get greedy and gloss over red flags when you get paid to package and sell risk to your partners instead of bearing it yourself.

 Yeah, TPO/non-delegated correspondent works as well. I dont know that I would allow Delegated in this scenario - lots of moral hazard and counterparty risk. They only other thing I would mention is that correspondent lending can be hard to turn off and on if liquidity gets tight without hurting the relationship.

My perspective was from a small business private lender rather than RE lending, but the mechanics were largely the same. What I have seen is an internal sales team (AE's/Reps who split their time between referral partner development and managing their pipeline) combined with someone solely responsible for digital marketing (social media, SEO, ppc). This dealflow is then supplemented with deals from the broker channel.

The broker channel will get leads in the door quickly, but they are usually of questionable quality and loyalty. We had to work out some metrics for how to vet and when to offload brokers because we would get spammed with trash deals or be competing with five other lenders whom the broker was pitting against one another. The dealflow from brokers is always there, but the juice vs squeeze conundrum is in full force because if you dont manage this closely, you will start soaking up tons of bandwidth and payroll with underwriting several deals for only 1 in 5-10 to actually close. Also, these deals tend to have very thin margins because the brokers will soak up a lot of the up front pricing while also pressuring you to get skinny on the rate. EPO's, PPP's, and clawbacks are critical to manage this as well. 

Going direct to client is the holy grail but is more difficult. Usually an originator/AE will develop referral partner relationships and rely on SOI to bring the leads in while also managing their pipeline. The mortgage world also mostly runs on this model for smaller to midsize orgs. Typically AE's will be commission only or commission + a small base. Normal comp is 100-150 bps on volume for these roles if commission only and completely self-generated leads. For lender provided leads, half of this is the norm.

Social media and SEO works, but you have to really niche and be strategic. Typically its the behemoths with huge marketing budgets who do well with this. There is definitely an economy of scale aspect to this. Generally what I have seen for smaller orgs (under $1B in volume) is that it's far more effective to bring in originators than to throw money at paid digital marketing. You have to really understand your funnel and market segment as well as execute extremely well for this to work.

Im local to Charleston and live downtown. Give me a call if you need anything. The REI community here is really active.

All real estate transactions in SC must be conducted by real estate attorneys. You cannot close an RE purchase or sale without using an RE attorney. Just a cost of doing business. Im not sure if this is what youre asking, but it seems like it as best as I can tell.

 Since you have work history, if you get a job with salary income and a credit score above 640 (680 realistically), a conventional cashout refi is within reach as soon as you reach those metrics. If you go self-employed, youll need two years tax returns. Most Helocs will require a solid year of tax returns, if not more.

I get it - tough spot to be in. Dig into reverse mortgages before pulling the trigger on anything, specifically HECM's (FHA product). Theyre expensive, but you wont lose your home to foreclosure unless you move out, stop paying taxes/insurance, or fail to maintain it.

Depending on your income needs, pulling equity out and lending privately combined with a fulltime or part time job may be another option that doesnt bring as much boom or bust risk as flipping.