Profile picture for cecil7

Small mortgage (25%) for 'toxic' buyer?

Hi. I have $150K to put down on a $200K property. Is there any chance an originator (or bank) would write me a note for the remaining $50K? No taxes or tangible work history. Thanks. C
  • March 07 2012 - US
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Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (20)

You get an A from me for your Class cecil C.
  • March 13 2012
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Profile picture for cecil7
Mr. Branch, Thanks for the reply and I'm glad for the opportunity to work forward in a positive manner. The problem with a reserve is we are liquidating said cash reserves for the $150K down payment! Maybe it might behoove us to only liquidate, say $100K, and seek a 'secured' note for the remainder ($93K), based partially on a cash asset (CD) and partially on the buyer's good credit and ability to pay vs. losing her substantial investment? Would that fly?
  • March 13 2012
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cecil7, I was not expecting or waiting on an apology but since you posted one I accept! My post should have just said the lenders you are talking to on this forum do not have a vehicle for a no doc anymore ( I am assuming that AND could be wrong ). It was never stated if this is a primary residence or investment and if investment I assume you already know about paying 5 points, 13% rate, and a hefty prepay penalty to use hard money. My question about reserves was in reference to using a securities based loan for the $50K since those loans are not mortgages and you do not need a job, income, or taxes to do that. The terms will be as good or better than a conforming 30 yr fixed. In fact, you could leverage someone else's asset(s) if you will not have at least $65K left in reserves. There is no tax deduction for that loan since it is not a lien on the property. If you were 62 or older you could use a reverse mortgage  without regard to income or credit but I am guessing you are younger than that.     
  • March 13 2012
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Profile picture for cecil7
After a few days' respite from this forum and the pending transaction, I do feel I owe Mr. Branch an apology. Although I did not find his initial response to my post particularly helpful, I do think I may have 'gut-reacted' a bit by immediately calling his character into play. I have reviewed several of his posts, which are numerous, and it is indeed clear that 'out of touch' does not fit, nor was it necessary for me to insinuate any correlation to any other industry other than what pertains to this forum. That said, I still think the 'rules of credit' in this country are pretty messed up! Best to Clay and in general, C
  • March 12 2012
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If you intend to purchase as an investment property, you will have no problem getting financed from a private investor without income verification..
 
If you intend to occupy the property, then as already mentioned in this post, it is illegal to make a loan without verifying ability to repay regardless of the down payment amount.
  • March 08 2012
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"I'm hoping someone has an 'in' somehow." -

They already posted it... it is called "hard dollars". (Non "qualified").


And then there always is "friends" and "family", and "loan sharks".  Or pawning other assets.

Or, perhaps the seller may carry the note, as long as the seller can foreclose on you (being listed first on the title for the property) and get the house back while still keeping all your cash.

But beware!  You essentially have admitted to U.S. income tax evasion, and substantial owed back taxes.  Anyone in their right mind would not only not loan you money, but they would also report your situation to the IRS for investigation to avoid the possibility of being an "accessory".
  • March 08 2012
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People as out of touch as yourself are indeed at the very HEART of the finance problem in this country.

Due respect? You can not shake someone's hand and then kick them in the shin...it does not work that way.  

cecil7, you seem like a nice fella,  to get back to square one, an apology to Mr. Branch seems to be in order...but of course that is up to you.   

 
  • March 08 2012
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Usually when someone says "with all due respect" they really mean the opposite.

  • March 08 2012
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Profile picture for cecil7
Mr. Mondello, it was "I" who felt insulted by what appeared clearly to be a lack of sincerity in Mr. Clay's response. But I distinctly addressed my reply to him "with all due respect", which implies that although I personally do not find the answer helpful in any way, there is no reason to diminish his capability in another capacity, or a different situation. Enough flaming, I'm hoping someone has an 'in' somehow. Cordially, C
  • March 08 2012
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The beauty of cecil7's response to Clays post is just how astute and obvious it is.  It's aimed at the wrong person of course, but he's right about how absurd and out of touch the rules of the Frank/Dodd act are.  Of course Clay didn't write these rules – he just tried to explain the rules that prevent us from helping people in cecil7's situation.
  • March 08 2012
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Hard $ - if the shoe fits, wear it. 


  • March 08 2012
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Cecil- Try asking around your area for some "hard money".  Speak to a local Loan Officer and/or a real estate attorney for some guidance.
  • March 08 2012
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Clay's response was actually very fitting  (as always) . Maybe you need the K-1 interpretation?  ... the guy tries to help you out and you insult him... bad cecil7!  bad cecil7!

Attention Astute Crowd: You won't  find a guy as 'in touch' with what is going on in US and World Financial Markets (Stocks, bonds, mortgage rates, regulations,  etc.)  as Clay.
  • March 08 2012
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LOL, good luck with your transaction. 
  • March 08 2012
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Profile picture for cecil7
Mr. Branch,
   With all due respect, your response has to be one of the most asinine and pompous replies I've ever seen posted to a 'help' forum. People as out of touch as yourself are indeed at the very HEART of the finance problem in this country. With an attitude such as this, you seem to have the makings of a career in the personal credit card industry. C
  • March 08 2012
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Cecil, see the excerpt from the Dodd-Frank Act:

Qualified Mortgages. The Act creates a safe harbor for compliance by defining an important new
category of loans called "qualified mortgages."23 For example, creditors and assignees may presume
that qualified mortgages satisfy the requirement that loans be underwritten based on the borrower's
ability to repay
. A qualified mortgage must meet several criteria, including a requirement that the points
and fees total less than 3% of the loan amount. The designation of a qualified mortgage, along with the
safe harbor that it provides, is very important because borrowers can raise inability to repay underwriting
standards as a foreclosure defense against creditors and assignees, without regard to any statute of
limitations. As such, there may be very limited appetite in the secondary market for non-qualified
mortgages.

Cecil, if you will still have $65K or more in a liquid asset after making the $150K down payment then you may have an option to do the transaction. Will you have $65K or more in reserves?  
  • March 08 2012
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btt
  • March 08 2012
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Profile picture for Cindy Quinton
I bet there are options out there for you. I would visit with a local banker to start. With interest rates so low, there are people looking for investments that pay better, maybe you could find an individual? Also, give the post some time and maybe even bump it in the AM since many of the mortgage folks are here in the day time.

And you know, it wouldn't hurt to ask about an owner finance.....and/or a simple cash offer for $150,000.

Regardless, good luck...and kudos for amassing $150K with back breaking labor!
  • March 07 2012
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Thanks for the reply. No, nothing that can be documented, as I am a woodcutter (though not as strong as Jean Val Jean!). I know 'no doc' notes are a thing of the recent past, I was just hoping that with such a strong down payment, representing three quarters of the purchase price, someone would write a note, kind of like the old '30/70 rule'. Oh well, times have changed I guess.
  • March 07 2012
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It is necessary to provide a stream of verifiable income to repay the loan of any amount.  Would the seller be willing to carry a note for the 50K?  Do you have any sort of income that can be documented? Investment income?
  • March 07 2012
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