All Forum Posts by: Ryan Dunn

Rates change all the times, but if you had a rate lock, that really doesn't make any sense to me. The home inspection really shouldn't have anything to do with the interest rate on such a loan. I think I would probably talk to an attorney tbh

these business purpose non regulated loans do not have rate locks that have to be honored legally.. they can and do change them unilaterally.. borrower accepts counters or declines and loan fails.

Yeah that makes sense. Never assume these types of lenders will behave like institutional lenders just because they use the same phrases. That's a real bait and switch scummy thing to do, but I guess I shouldn't be surprised these days.

keep in mind this is not usually bait and switch it could be and they are not being scummy.
they simply are at the whims of thier senior credit facilities wants and needs.. These companies do NOT have their own money they all tie into Large hedgefund or insurance company LOC's that can change on a whim and you know sheeet flows down hill.
So cant just jump to scummy and bait and switch..

Again it could be there are for sure brokers that will do that. Bottom line these are NOT federally regulated or state regulated loans.. they who have the gold make the rules.

If you recall when the rates jump super quick a few years ago many of these same hedgefunds/insurance companies just one day decided to stop lending all together until rates stabilized.. And some of these left HML in a tight spot borrowers could not access their draw money.. this happened just recently to Fund that Flip.. and their borrowers I know i got a call from one of them that was owed 300k in draws that was not coming.

Yes they were great to work with and all and all it was not a bad process.

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Quote from @Mike Dymski:

At 7.8%, for an asset class like real estate, you want to be the lender and not the borrower...

Thats so true

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I spoke with them on the phone today, and it turns out I was off on the interest rate they originally quoted me—it was actually higher.

The main issue, though, is that they told me the rate was locked, but then they raised it. They explained that the rate was locked when the loan went into underwriting. However, since the repairs took a few days and the appraisal took even longer, the loan came out of underwriting. When it went back in, they had to relock the rate. They got us the best new rate they could, but rates have gone up since we first started.

At this point, it’s up to me whether to accept the new rate or walk away. Thanks for all the replies.

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Quote from @Chris Seveney:

Quote from @Jay Hinrichs:

Quote from @Matthew Crivelli:

Quote from @Jay Hinrichs:

Quote from @Matthew Crivelli:

@Ryan Dunn There is a large capital provider that owns multiple lending companies. (Finance of America, Civic Financial, a few other players) They raised rates on there 30Y product about two weeks ago. I suspect this is who is financing your loan. We were told the secondary market started rejecting the lower priced paper that they were originating and they were forced to raise the rates.

And they are not beholding to owner occ disclosures they can do whatever they want .. you either accept or dont close.

He's taking a commercial rental loan made to his LLC. (more than likely) The rates are not locked in until final approval is given. Commercial lenders are not playing by the same set of rules as conventional lenders.

Even if they are locked in does not mean anything they can change them anytime they want these lenders are not regulated like Owner occ lenders thats the bottom line.. it does affect their crediblity i suppose and risk of them getting trashed on SM but its their money thier rules.

I agree. They can change terms basically at anytime before closing for non-owner occupied - is it good for the reputation - absolutely not - but it does occur. In the times I have seen it, it has been due to the borrower saying they have like a 720 credit score and it comes back a lot lower, or the financials of the deal are not what was represented.

It was not form a low credit score. They ran that way back at the begining.

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Quote from @Matthew Crivelli:

Quote from @Jay Hinrichs:

Quote from @Matthew Crivelli:

And they are not beholding to owner occ disclosures they can do whatever they want .. you either accept or dont close.

I think this is what is going on.

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Quote from @Mike Grudzien:

You need to speak with an experienced attorney ASAP!
Mike

Does that its a DSCR loan change that thought?

Thanks

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It is a DSCR loan on two homes i have owned for 4 years.

Ok i really wanted to make sure i was not crazy. Thanks for taking the time to read and respond.

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Hi,

I have two BRRRR loans with Fixated Funding, both starting and closing on the same day. One loan was locked at 6.9%, the other at 7.1%. However, I just received the closing docs, and the rate on the 6.9% loan has been increased to 7.8%. I wasn't notified about this change until I saw it myself.

When I asked why, they said the home inspection found some issues that were fixed and re-inspected, but I’m confused why this would result in a rate increase. Also, Fixated moved my closing date a few times, but luckily I didn’t have another deal at risk.

Does this sound typical? I’m mainly concerned about the rate change happening without prior notice, especially since both loans started and are closing on the same day.

I’m scheduled to sign tomorrow and close on Friday. Any advice would be appreciated!

Thanks!

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@Jay Hurst

So then is the next talked about rate cuts that could happen in Nov,Dec getting priced in now or in the next few weeks? Or when will that happen since this .5 was already priced in months before.

Thanks

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I know the market had priced in a .25% drop into loans for the last few weeks maybe a month. So when do we start to see the extra .25% hit on the loan side?

Why i ask is i am looking for a DSCR loan and hoping to see better loan rates soon.

Thanks

2 Votes

All Forum Posts by: Ryan Dunn

Ryan Dunn has started 7 posts and replied 42 times.

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: Unexpected Rate Increase on BRRRR Loan – Is This Normal?

Post: The fed just cut mortgage rates right?

Post: When do you think we will see the .5% rate drop hit loans?