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What's wrong with sub prime and stated income with a maximum 75% loan?
We do have stated income loans, I have had them for the past 3 years. Very little people can do them. However, send your friend my way I can do a stated income for him if he has those metrics.
Stated income loans are banned from the U.S. per CFPB it's illegal so no bank gets legal protection from a lawsuit. So, only a few people can do.
I have done 5 non QM loans this year all to rich people. It's there for wealthy people
He was trying to get a 3.75% loan with no costs. 30 year. His existing rate is 4.5%. Stated would have higher rates and costs.
logan - in your estimation how much leverage does the buyer have right now at the negotiating table? if a builder/lender has qualified buyers in the system, how much can those buyers push their desired terms? thanks.
It takes less than 5 minutes to know if you're qualified for a loan or not after filling out an application. The standards are low, the only issue comes up is with self employed because they have to give 2 years tax returns and YTD P&L and can't use any of the business money for the home purchase
He was trying to get a 3.75% loan with no costs. 30 year. His existing rate is 4.5%. Stated would have higher rates and costs.
Oh you're talking about a refinance, different item all together then. 3.75% no cost loans is a 2012 early 2013 story that rate is long gone
thank you - yes, we are pushing hard on a builder who has excess supply and future phases un-reserved.
thank you - yes, we are pushing hard on a builder who has excess supply and future phases un-reserved.
Here is my cell 949-291-8293 if have more questions, hard to get details on a transaction on a web thread
It takes less than 5 minutes to know if you're qualified for a loan or not after filling out an application. The standards are low, the only issue comes up is with self employed because they have to give 2 years tax returns and YTD P&L and can't use any of the business money for the home purchase
hmmm - they took 3 days to process a pre-approval (with a credit pull) and we are salaried with over 10 years in our industries and have excellent credit. yeah, i don't like how they've been dealing so far. maybe time to move on...
hmmm - they took 3 days to process a pre-approval (with a credit pull) and we are salaried with over 10 years in our industries and have excellent credit. yeah, i don't like how they've been dealing so far. maybe time to move on.
I can't explain how awful that is you must be dealing with retail or a builders lender
If you can't show enough income to buy a home with this metric, can't buy a home
620 fico
3.5% down
43% Debt to IncomeIf we ease from these standards we are just allowing poor Americans back in housing
Well not until we protect the RE industry and allow banks to make houses deemed unfit for resale. Until one of their starwmen companies comes along along and buys them at auction takes a few turns at the helm of the paint brush then resales the house for a $60K profit.
It boggles my mind, that anyone and everyone involved with America's RE health who has the affordability factor in mind only when it comes to the buyers ability to repay. But then consider houses under valued when a live potential buyer comes along.
There's a sweet spot for a healthy market, in healthy markets poorer people can find houses that are with in their income threshold. That threshold shouldn't be an artificial arbitrary number that man made week over week inflation creates.
If our governmetn doesnt' give a shit about the manipulations and price gouging then I fully support them giving out as many no doc and liar loans as they can muster. Even unemployed people should not be turned down from a mortgage.
Come on let's light this puppy, I'm sick of the RE insiders getting all of the "Shit for Free" gravy. What's good for them is great for every one else.
The FHA should be giving loans on those $40K distressed houses in black or Latino neighborhoods, then giving a $20K grant to fix them up. They would still be $140K on average bellow what the current system is putting them in.
If anyone is paying attention to the Zillow heatmaps accross the country in cities accross America, you will blatenly notice that the RE industry is re-Redlining neighborhoods that they fucked them selves over on back when they did during mid last century.
It was short sighted of them that 80% of the black neighborhoods would end up just minutes from downtown and all of the financial centers in America.
So they are trying their damnedest to push those buyers into health mixed neighborhoods that aren't as viable as a premium RE location, and distressing neighborhoods that were healthy even after the RE crash.
If the Government is going to be in Real estate, the let's get them "ALL IN!".
If the Government is going to be in Real estate, the let's get them "ALL IN!"
Mandatory 2% capital rule for FHA, they got 2 bailouts and Treasury credit line to boost their capacity to lending. It's just that their loan isn't comparable to 95% conventional loans which people have been getting. Even I haven't done a FHA loan since 2012
However, the GSE will bring out a 3% down loan soon which will make FHA totally irrelevant unless you're lending to multiple people in one home
Yeah but that 2% capitol would be easier to swing if the houses weren't artificially massaged to be 40 to 60% higher.
Yeah but that 2% capitol would be easier to swing if the houses weren't artificially massaged to be 40 to 60% higher.
You can see why they don't really want to push FHA to lower limits, why the new loans going through the GSE's
Someone is finally offshoring something to America: housing for wealthy foreigners. See, folks, globalization financing works! Stop complaining, your standard of living is rising as we speak.
Good Line :-)
‪#‎QE‬ ‪#‎RIP‬
10 year low point on Fed day 2.27% last week 2.24% not much movement but we saw a spike on the 10 year to 3.35%
We are now .48 basis point higher from the 10 year 2 weeks ago
It looks like we have seen the low's in mortgage rates for 2014. The irony is on the day the ‪#‎Fed‬ ends #QE we are at 21st century lows for mortgage purchase applications.
Can we get a refund on that 4.4 trillion
Hmmmm... let's face it. Rates can't go above 4% just to keep this housing market afloat.
It really didn't do that much when it was 3.25% back in 2012. We just had a very low level of sales to work from, the net % of mortgage buyer never grew
So, as long as Rich Americans and Foreigners buy homes sales can keep at bay.
Thank you for telling the truth.
He's a doctor.
Your friend could just save 400K and then buy the house. There is no problem with this case, and this is not a representative example of why people can't buy houses. They can't because they don't have the money.
The problem is not lending standards. The problem is the expectation that housing prices should go up 6% regardless of how much wages go up.
When you have such an expectation, lending standards will NEVER be lose enough.
Housing is doing well right now. It's up big time from last year.
So, as long as Rich Americans and Foreigners buy homes sales can keep at bay.
Home sales... Personally I don't care how many houses are sold: I want to know the price. The price says by itself only rich Americans and foreigners buy (cash or not). If the price goes higher, even less sales will happen, to even richer buyers.
The problem is not cash sales boosting overall sales. This is in part a feature of a landscape where millions of people have retirement money available to invest.
No... the problem is we are simply not getting a large enough supply of new houses built for $250K. Building is simply not keeping up population growth.
And the consequence is the deplorable situation we have now: poor people (and young people) living in basements, or paying rents through the nose, and rich people fighting it out, with fists full of cash, for the few houses that are actually for sale.
No... the problem is we are simply not getting a large enough supply of new houses built for $250K. Building is simply not keeping up population growth.
They are building rentals in a strong way this cycle because builders know that the capacity to own the debt is weak.
However, rent inflation is picking up more than wage growth
Double housing inflation problem
They are building rentals in a strong way this cycle because builders know that the capacity to own the debt is weak.
However, rent inflation is picking up more than wage growth
Double housing inflation problem
Rent inflation says eloquently they are not building nearly enough.
We live in a world where people in power deliberately decided to restrict the availability of housing to facilitate the transfer of wealth from young people to older people - and tax collectors and WS.
Who cares about the quality of life of new generations.
Rent inflation says eloquently they are not building nearly enough.
They are playing catch, overbuilt on Single Family Starts.
Back in 2012 I wrote about this very topic
"However, if 2012 is the year for the big recovery in housing then why are the four horsemen not bringing their zombie homes to the market to sell to primary resident buyers? I believe they are seeing what I have said for years now: that we simply don’t have enough qualified home buyers ( excluding cash buyers) to take on the true massive inventory in this country.
Even though all a person needs is a 620 fico, 3.5% down payment and verified income which demonstrates the capacity to buy the home, there yet remains a dearth of qualified primary resident buyers to absorb the inventory.
A primary resident housing boom is not on the horizon."
http://loganmohtashami.com/2012/04/02/housing-actions-speak-louder-than-words/
So we have the buyers, but where is the supply???
We went from somewhere like 267 square foot per person to now 967 square foot per person as a country over 40 years. I don't believe the builders can turn on a dime.
Now there is a test pilot for $120K starter homes that are coming in 2015 or 2016 for one builder, turn key no upgrades. That I suppose is a chart
A house is worth what YOU pay for it. Californians love to overpay for housing.
That's a stupid argument.
First, apparently you don't believe in the notion of market.
Second... sure you can for a shack for $500K instead of a crappy home for $1.2M. The choice is just your money or your life - whichever you value most.
We went from somewhere like 267 square foot per person to now 967 square foot per person as a country over 40 years. I don't believe the builders can turn on a dime.
They can start building smaller homes and apartments today. I don't believe they need years to make new plans.
What we are seeing is not inertia: Today builders are focusing on the high end because that's where they make the best margin. Considering they're not given leeway to build en masse, they are building what they can build for the high end. And that's fine with me: housing is fungible.
Why would the same house that sells for $1.2M in CA sell for $300K in my county?
Because your county is composed of morons and no one smart, with buying power, wants to live there?
They can start building smaller homes and apartments today. I don't believe they need years to make new plans.
Wouldn't you have the problem of a major over hang of 30 plus year of supply of bigger homes
Wouldn't you have the problem of a major over hang of 30 plus year of supply of bigger homes
What are you saying? That people don't want big houses?
That current big houses are not occupied?
That people don't want big houses?
No, people like big homes, big cars, big meals, it's the American way
No, people like big homes, big cars, big meals, it's the American way
However if they can afford only smaller apartments, young people would buy that - or at least rent them - provided they are available.
However if they can afford only smaller apartments, young people would buy that - or at least rent them - provided they are available.
The young are renting until they get married. Housing with dual incomes & assets is ok. Homeownership for young couples has held up well.
It's just with poor household formation growth, the young hasn't even started to rent like they have had in previous
1. Rent
2. Date
3. Mate
4. Marry
3.5 - 6 years after marriage is usually when young couples buy. We have a major delayed factor after the Great recession
Lenders should turn everyone down for wanting to pay more than 10% of listing price for shacks.
$400,000 x .10% = $40,000, We don't need no steenkin' loan.
Everyone has the right to overpay.
All aboard on the Overpay Bandwagon!
Lenders should turn everyone down for wanting to pay more than 10% of listing price for shacks.
If the appraisal comes in low then they won't keep the loan in its current form. The lender would require them to bring the 10% down to cover the higher purchase price.
So if a home is 10% over a listing price and their is no comp to support that then they won't go for it. I haven't had any deals do that this year but last year 2 of my transactions had that happen and the seller cut their price back down
Try this:
- Which goes to core thesis that we simply don't have enough qualified home buyers excluding cash buyers to call this a recovery.
Mutulfunds .com wanted me to shed some light on why Warren Buffet doesn't understand why Americans aren't buying homes with rates so low
When asked to give an opinion as to why Warren Buffet is terribly confused by the low housing demand when rates are so low; my answer: It’s not rocket science, it’s simply math.
My Q&A with Mutualfunds.com
http://mutualfunds.com/q-and-a-and-interviews/interview-with-logan-mohtashami/
Is this how you plan to speak to MutualFunds?
Have they been prepped to expect this impediment?
If the Appraisal comes in low then they won't the loan stay in its current form.
If the Appraisal comes in low then they won't the loan stay in its current form.
If the appraisal comes in low, then they won't keep the loan in it's current form.
I slip now and then
Insights from Logan Mohtashami
Logan Mohtashami
In reading much of your recent commentary regarding housing data, you have continued to take quite a skeptical stance as far as Wall Street’s constructive vantage point.
My core thesis since 2010 has been simple. We simply won’t have enough qualified home buyers in America ( X out cash buyers) because we never had the financial good in the first place. Take demand from 1996-2007 with a grain of salt on two fronts:
We had 2 economic cycles that had a financial bubble factor to it, creating fake demand for fake good paying jobs. We don’t have that in this economic cycle.
Exotic loans are all gone. This is a a very good thing as it shows that Americans simply don’t make enough money to own the debt and total cost of a home.
For a clip of Logan commenting on the housing market, click here.
Mortgage purchases as a percent of the market sales has been 20% below historical trends for years now and rates have been 5% since early 2011.
Warren Buffett was quoted recently as being surprised at how slow the real estate recovery has been. Can you point to some of the most recent data that is evident of a housing market that continues to sputter and not quite give us the affirmation of a classic bull market?
In 2000, existing home sales were 5.2 million with 8% interest rates and we had 4 million less people working in the U.S. 2014 is the year that a lot of bulls said demand would grow because supply was coming back. It didn’t happen because we lack real demand from main street.
In 2014
We had rising inventory
We had lower rates
We have rising rents
Still demand is going to be negative year over year.
For additional information, check out Rising Inventory & Low Rates Hasn’t Created More Housing Demand.
Are there areas of the country that stand out from a loan application standpoint?
California is a housing inflation nightmare. My own data shows that 82% of the working population is priced out of the housing market based on Median Income to Median Prices, once you exclude the Rich which to me is 3 times median income, so roughly 180K.
You have cited multi-family housing as a lone bright spot. Do you see this trend continuing?
Demographics of America are bullish for multifamily because we will have a lot of young Americans, aged 20-35, working (hopefully) for 2 decades and they will be natural renters until they rent, date, marry and then buy.
Not sure if you have a market forecast for interest rates for 2015, but where do you see mortgage rates heading?
I don’t see rates going too much higher from here. We could be in a range of 4%-5% for 2015.
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http://loganmohtashami.com/2014/10/29/mortgage-purchase-applications-near-21st-century-lows-as-q-e-ends/
#housing