Stability Of Income — A Simple Definition:

One of the factors that underwriters will consider on a loan application is “stability of income”.  The stability of income risk factor is one where the underwriter will attempt to measure how likely it is that your income may continue based on what your previous work history looks like.

Stability Of Income — An Expanded Definition:

While there may be a wide range of things an underwriter can consider regarding the stability of income, there are a few specific things that an underwriter will look at when considering the stability of income.

These include:

Gaps in Employment – If there are any gaps in employment that are longer than one month, be ready to provide an explanation.  If you happen to be a seasonal worker, allowances can be made but be ready to provide documentation.

The Probability Of Continued Employment —  What are the chances of continued employment at your current employer? What are the chances that you can get a similar job based on your qualifications, previous work history, education and location.

Frequent Job Changes — If you have a history of changing jobs, it isn’t necesarily a bad thing as long as you can document that you have changed jobs for advancements, more money, benefits or other related topics.  Remember, the underwriter is looking at the stability of income – not necessarily how long you have been at one company.

Stability of income is one of the important items that an underwriter will consider when you apply for a loan.  By keeping in mind the simple items of: gaps in employment, the probability of continued employment and frequent job changes you can be ready to provide explanations — before the underwriter even asks for them.

As always with this kind of pseudo-crystal-ball post, take what I say here with a healthy dose of counsel from your own mortgage professional.  You do have one of those, right?  If so, call him and talk this over.  If not, Zillow is a great place to find one.

Tonight we find out one big piece of the rate puzzle, in figuring out which of the two major parties in US politics is going to control the US Congress for the next two years.  The Republicans are almost surely going to take over the House of Representatives, but if they do not take the Senate as well – and the smart money right now says close, but no cigar – that will probably mean gridlock until the next presidential election, in 2012.  Gridlock may sound like a bad thing, but for markets, it’s great.  Markets love certainty.  They love consistency.  If the Congress disappeared altogether, that would suit them fine.  This would be as close to that as we could get.

Your first indication will be at 7pm EDT, when the first polls close.  If the GOP defeats John Spratt in South Carolina’s 5th District, be prepared for a gigantic Republican win in the House.  For the Senate, watch West Virginia’s race, polls closing at 7:30pm EDT.  If Joe Manchin hangs on to win there, the Democrats are likely to hang on to the Senate.  If he loses, we may have GOP majorities in BOTH houses.

What does that mean?  Out on a limb here, but the Republican wave appears built on small-government, almost libertarian types.  If that wave comes in big, it will likely mean a reduction in regulation of the mortgage markets over the next couple of years, and that would mean lower closing costs on mortgage transactions.  However, that same budgetary hawkishness is also likely to be focused on encouraging the Fed rate to rise, and if that happens, mortgage rates are going to go with it.  So a mixed bag, there.

The second piece of the rate puzzle is the bigger one, and that comes at 2:15 EDT on Wednesday, when the Fed announces its plans for the next round of quantitative easing, or QEII, described in detail here.  This one is easy to call.  If the Fed says that it’s going to buy $500 billion of treasuries starting right away, you can float all day long.  Rates will fall, and probably as much as .25%.  If, however, the Fed says it’s going to buy in the region of $300 billion over some months, you better have your lock in place.  The markets will hate that news and we’ll most likely see a large correction higher in rates.  If the Fed is in between, the markets will still move, but nobody can say how.  There is a lot of news coming out tomorrow, and absent a surprise by the Fed, that news could do its own moving of our mortgage rates.

Either way, if you’re looking at refinancing or closing on a purchase, CALL YOUR MORTGAGE PROFESSIONAL NOW.  Get ready.  Forewarned is forearmed.  Luck favors the prepared.  All that stuff.

Verification and Validation – how it can affect your loan. -

Today’s economic crisis has taught mortgage lenders one huge lesson they are all living by  - verify and validate every loan file. Documentation – sounds like an easy task, but simply turn the clock back just a few years to the days of stated income loans, no income loans and even no income, no assets, no doc loans (just give me a high credit score) and you have the reason we now live in a Full Documentationworld. Did these loans make sense? Opinions vary, but eliminating as product that was intended for self employed borrowers has restricted business owners from tapping needed equity to stay operational. Ask any business owner you know what they think the chances are of qualifying for a loan would be today.

Below are 7 items that must be verified and validated these days when applying for mortgage financing:

Employment – Even after a loan has been cleared to close, telephone confirmation of employment is now routine just before a loan is scheduled to fund. In other words, don’t quit your job!

Income – 30 days worth of pay stubs. Previous two years W 2′s. If you show any kind of business income or loss, last two years tax returns (business and personal). Signed 4506-T forms at loan application allow lenders to order tax transcripts from the IRS to match up to your income… And they all order them. If you show a loss on your tax returns tell your loan officer upfront and save yourself frustration. This is not always a deal killer but will affect your debt ratio.

Assets – When a loan is run through automated underwriting it takes into account the assets that are stated. If you show money in checking, savings, 401k or any other investment, you will want to validate it by providing statements. Many times the final page or pages of the statements are blank. Include ALL pages of your statements regardless if they are blank. Note – if you are printing these documents from the internet, as a security measure, institutions do not include name or account number. This would not be acceptable documentation.

Deductions –  Provide supporting documentation for payroll deductions such as child support, alimony, garnishments, 401k loans. Anything that affects your debt ratio must be documented which would include providing divorce and separation agreements and terms of of 401k loans.

Appraisals – This verification is done behind the scenes, but rest assured, even with all the new HVCC appraisal regulations, lenders validate appraisal figures through automated valuation models (AVM’s). The days of stretching home values in order to close a deal are long gone.

Gift Funds – Lenders want to see gift money comes from an acceptable gift source. And they way to show this is a paper trail… A bank statement from the gift source showing funds were available and a copy of the transaction transferring monies from the gift account to the borrower if deposited into borrowers account.

Earnest Money Deposit – Also referred to as the EMD. Many times this single item goes undocumented and causes a delay in clearing a loan to close. Sure we need a copy of the front of the check, but lenders want to see that the money was deposited before crediting it to the transaction.

These are just a few examples of documentation to gather when applying for a mortgage. This is just a guideline to use and lender requirements can and will vary, but providing the above documentation to your loan officer, you will greatly reduce the chances of frustration and delays in your loan closing. The mortgage process can be stressful enough these days. Supplying the required documentation the first time a loan is submitted to underwriting will increase the chances of a stress free closing.

Property values can be great fodder for everything from smiles to frowns and on rare occasion even lead to shouting matches. Understanding the procedure in estimating value is crucial to understanding how the components of value establishment work together. As in any science there is a protocol to aggregating, evaluating, calculating, and disseminating information which leads to the opinion of value and in real property appraisals the outcome is sensitive to say the least.

For the sake of this short article let us try and follow real estate appraisers who have thousands of hours as apprentices, hundreds of hours of classroom training and are under constant scrutiny by every party involved to a transaction in addition to governing boards and regulators. We will make use of available services like Zillow to help us easily find properties to which our property will be compared for sales value.

Appraisers supply their full report to the client’s lender on a form called the Uniform Residential Appraisal Report (URAR) which is Fannie Mae’s form 1004 for single family homes and a 1007 for condominiums. It is a standardized report which loan officers and underwriters are trained to read and comprehend because the valuation determined by the appraiser is crucial to the loan to value of the mortgage. This valuation is determined primarily by recently sold properties, similar in construction and size, called comparables. Industry insiders generally refer to these as “comps”.

Every URAR should have at least three comps and appraisers who take the time to return five or six comps are doing everyone a favor. As you may imagine it can be more difficult to find recently sold properties similar in construction and size in rural areas than it is in suburban areas with larger neighborhoods. In fact lenders and appraisers occasionally become at odds with one another over the lack of acceptable comps in rural markets.

Comparable Sales on Zillow

TIP 1

Finding comparables in suburban areas is relatively simple even for the novice. While appraisers have access to powerful database programs like RedLink the novice user can visit Zillow.com to find recently sold properties in the market area of the subject property. In the image to the right are three properties, close in distance and similar in construction and size to our subject property.

You may also perform a simple search engine search on the property address. Using your favorite search engine like Yahoo! simply search for the address of the subject property. This generally returns information which can be valuable in your investigation. One of the results generally returned in a Yahoo! search is a map of the location along with a list of local businesses, schools, houses of worship, government facilities, and other points of interest. Perhaps you will discover your property of choice is in the back yard of a federal prison.

TIP 2

One of the most important factors of using recent sales for comps is the sale date. Every lender wants to see sales within the last six months, will accept sales in the last 12 months and requires a good explanation for using sales older than 12 months to establish values. The image is from Zillow and is found simply by searching on a property address for any property.

Almost as important as the sales date is the distance from the subject property. To establish the most accurate value we cannot skip over recently sold properties to get to other properties with a sales price better supporting our goals. In any event lenders prefer sales within one mile of the subject property. Once again it stands to reason this is simpler to achieve in suburban areas than in rural areas where homes are often miles apart.

Note the number of bedrooms, bathrooms, square footage, year built, and other features mentioned in the comparable sales report. You may click on the Zillow link for each recently sold property to find even more information about the comparable to make sure it is the best comp for your purposes.

TIP 3

Now that you have your comparables you should do a little more investigation to make sure these are the most reliable comps to your subject property. Almost every county in the nation now has their county tax records online. While tax records are not reliable for transaction purposes they may provide information valuable to you in your investigation. Even if they are not online a quick visit to the county records department will help you find the tax assessor’s value and notes on the properties in question. Assistants are on hand to help you in your research.

TIP 4

Since you know the property address do yourself a huge service and do a visual inspection of the site. Generally in neighborhoods with a Home Owner’s Associations you will not find too many surprises about the condition of the construction but you may see properties which look identical on paper are completely unmatched where the site (lot) is concerned. If home A is on a clear lot with a gently rising slope and home B is in a valley where you only see the roof from the street that is going to make a difference in the sales worthiness and value of the property.

During your visual inspection journey you may also find other evidence which may help better support the value of your subject property. You may see a for sale sign in the yard of a similar property with a “sold” rider on it. This information could be highly valuable as it may only have been recorded in the last few days meaning it did not show up in your initial search. More recent sales means more accurate value. Take notes as you drive about everything from condition of the neighborhood to proximity to commercial and industrial zones.

Remember, your appraiser can only view the inside of the subject property to see what improvements have been done to the interior. Things like new imported marble hearths and cut stone counter-tops may be inside those other properties where the subject property has no hearths and laminated counter-tops.

TIP 5

Understanding the comparables selected by a professional appraiser is simple. Since they all use standardized procedures in valuation you can easily follow along with what they have done to establish the values of the comps. While there are multiple methods appraisers use to establish value we are generally going to see the Sales Comparison Approach. Other methods include the Cost Approach and the Income Approach which are beyond the scope of this article.

In the Sales Comparison Approach the appraiser looks for values just as we did in tip number one. In reality they have much more experience and a powerful set of tools used to help in their search but nevertheless are looking for the same things we did: recent sales of similar properties. The appraiser uses a part of the URAR referred to as “the grid” where she records her findings. In the grid will be somewhere between three and six properties listed by address and physical attributes. At the bottom of each column will be adjustments for improvements, age and other factors.

Properties in the grid on the report which require the least amount of adjustments are considered to be the “most similar”. These properties are given the most weight in value comparison in most cases. You may see properties with value adjustments over 10% the lender may ask for further explanation or an additional comp even if it means a slightly older sale or increased distance.

Summary

While these five tips will help greatly in understanding how comps are sourced and used this article only scratches the surface. Continue your education by reading some of the appraiser’s posts on Zillow and around the Internet. Valuation is a highly important subject which cannot be fully mastered in just a matter of moments yet this article should have supplied the reader with enough thought starters to continue their research and find the answers to their questions. Remember we did not cover important information such as the value of subterranean space to above ground space, how to determine what makes a room a bedroom or the value of property improvements like pools, detached garages and landscape construction.

If you have ever used Excel spreadsheet, which I do daily in calculating mortgage and investment solutions, the answer to the question in the title of this post requires a circular calculation.

Here’s what I mean. As you are solving for the amount of home that translates into the amount of payment you want to have, changes in one box, necessitates changes in another, which in turn changes the payment which requires a change in one or more of the inputs.

Excel does this for you, but you can do it too.

You take a simple mortgage calculator and plug in a few variables. Let’s say rates are 5%, you are choosing a 30-year fixed mortgage—so 30 years or 360 payments—then you put in an amount of the loan you will be borrowing, and you solve for the principle and interest payment.

Add a monthly amount for property taxes – Summer and winter amounts added together and divided by 12.

Add an amount for home insurance. For an estimate, take the sale price and multiply it by 0.0035 (or .35%). Divide that by 12. Then, if you have mortgage insurance (which you would for an FHA loan or a conventional loan with less than 20% down), you need to calculate and add that in. For most deals, you’ll get close enough (a little to the high side) if you use an amount that is 0.0075 (or .75%) time the loan amount. Divide that by twelve and add it in as well.

Once this is all added together, you can see where you’re at and start to move upward or downward in the price of the home (moving taxes, insurance, and mortgage insurance up or down as well).

Let’s say you are after a $1500 payment, and you want to put 10% down on a conventional loan. Without checking first, we start with a particular home that has a sale price of $200,000. You have $20,000 to put down, that’s 10%. The seller is going to pay all of your closing costs.

Your loan amount is $180,000. At 5%, 30-year fixed, the principle and interest payment is $966.28. Tuck that away.

The taxes on this particular home are listed to be $4260 per year. That makes $355 per month.

A good estimate for home insurance is 0.0035 times the sale price. $700, more or less – round up to $720 and you have $60 per month for this.

Mortgage insurance is next. Take the $180,000 loan amount and multiply by 0.0075. That comes to $1350. Divide that by 12 and you have $112.50

Your payment for this particular home would be $1493.78 per month, all included.

(If you are buying a condo, you can usually eliminate the home insurance and add in the association dues. The rest would be about the same.)

Not bad for your first try!

Image Use: (L. Marie per this)

Why would someone have two FHA loans at the same time? Here are the reasons and the exceptions that may allow someone to have 2 concurrent FHA Loans.

• Increase in family size – There must be an increase in family size in which their current house can’t support the new family member(s). You will have to prove the increase. Also, you must have 25 percent equity in your current home or pay it down to 75% LTV (loan-to-value).  An FHA approved appraiser must be used to determine such new value.
• Relocation – If the borrower is relocating and it is established that they aren’t in reasonable distance from their current property. Keeping in mind that reasonable can be defined differently from any lender.

Note – If that borrower(s) returns back to the same area, they are not required to re-establish residency in that property in order to have another FHA insured mortgage.

• Vacating a jointly owned property – A borrower my leave a property and be eligible for another FHA loan if the co-borrower is to stay in the same property that is being vacated.

A good example of this is because of a divorce and that the vacating spouse needs to buy a new home.

• Non-Occupying co-borrower – If someone previousily co-signed for a family member or relative while using a FHA loan.  This type of FHA loan is called a non-occupant co-borrower loan. This borrower would still be eligible to purchase their own home using a FHA mortgage.

Without meeting any of these requirements, a potential borrower would not be approved for a second FHA insured loan.

The VA Loan Guaranty program has some of the most potent home-buying benefits around, chief among them the ability of qualified service members to purchase with no money down.  But few civilians are aware of a little-publicized program that allows them to purchase VA foreclosure properties using many of the same benefits provided to American service members.

It’s called the Vendee Financing Program. Some of the nation’s veteran-owned homes that wind up in foreclosure enter a pool of properties open to non-veterans through this program.

Civilian borrowers interested in purchasing these properties enjoy the same types of financial benefits as their veteran counterparts. This program has long been a favorite of real estate investors, who can purchase multiple properties using this program. But it’s also a great way for prospective home buyers to maximize their purchasing power.

Here are some of the Vendee Financing Program’s biggest benefits:

• Low and even no down payments on owner-occupied properties
• No private mortgage insurance or mortgage insurance premiums
• Sellers can pay up to 6 percent of the sale price to cover closing costs and other qualified expenses
• No prepayment penalties

Prospective borrowers can secure fixed-rate loans at both 15- and 30-year terms. Just like most VA borrowers, civilians who utilize the Vendee Financing Program are required to pay a Funding Fee to the agency (in this case, it’s currently 2.25 percent of the loan amount). Borrowers in most states will have to put up some earnest money, too.

As far as the VA is concerned, credit scores and appraisals are generally not part of the underwriting process. The VA is typically more interested in verifiable income to help ensure consistent repayment. But lenders who engage in this type of financing will certainly take a closer look when it comes to underwriting — they can apply degrees of scrutiny beyond what the VA mandates.

Consumers can go online to search for Vendee homes in their area.

Image: Eric Beato

For all you consumers attempting to time the market and get the very lowest rate available, I have a few words of advice. Find your target rate, put your finger on the trigger and be ready to lock at a moments notice. Monday was an amazing day for mortgage rates. Well, the morning was… and then the rate changes for the worse began arriving by email from investors. This morning rates opened up even higher and indicators tell us rates will continue to worsen.

There was a time not so long ago when I could accurately predict rate changes and offer up advice to my clients when to lock or float their loan. The 10 year bond was always a trusted friend when following the market. As a rule, good news in the economy translated to a good day in the stock market and a bad day for interest rates. Bad economic reports would always pull money from the market to the safe haven of treasuries and cause mortgage rates to drop. But these days nothing seems to make sense anymore.

Many American homeowners, at least the ones who qualify with the BIG THREE – income, credit and equity – have refinanced sometime in the past year or so. But mortgage rates continue to fall and refinancing yet again could make sense and save a ton of money over the lifespan of a loan. The difference between a deal that makes sense and saves money vs. a deal that makes no sense could be 1/4 of a percent in rate. Between yesterday morning and this afternoon, if you did not lock your loan, you could be looking at a rate anywhere from 1/4 to 1/2 point higher in rate. In mortgage rate terms it could be the difference of 3.75% vs. 4.25%.

If your current mortgage is 5.25%, based on the assumption above, you just removed yourself from the marketplace and are left hoping for another drop in rates. Is that drop in the future? Many seasoned pros I have talked with claim lower rates are a good possibility. My point is this – If a deal makes sense, do it! Make believe loans do not save you money, closed loans do. Find yourself a highly skilled and experienced mortgage banker, create a plan together and when your strike rate is available, lock it!

Timing is everything in the mortgage rate market. Don’t miss out….

5 Top Reasons to consider a refinance – click here

So now, apropos of the foreclosure mess, which we addressed last week, Sheila Bair, the Chairwoman of the Federal Deposit Insurance Corporation (FDIC), comes forward with a proposal that is so radical it just might work.

First, let’s set the scene, in case this is the first you’ve heard of Foreclosure-Gate.  Banks are trying to foreclose on homeowners that are delinquent in their payments.  But one of those curious things about the law is that whoever forecloses on a property must have standing to do so, that is, he has to prove that he owns the property that he is seizing.  It appears, however, that some banks have been less than candid about their standing.  They should have it; they’re doing the servicing, after all.  But sometimes they can’t prove that they are legally entitled to foreclose, because, in point of fact, the title never registered their claim.  The system that was supposed to take care of this is the Mortgage Electronic Registration System, or MERS.  It, um, failed.  And failed.  And probably is still failing.

That leaves the chain of title in doubt and makes it very hard to foreclose.  The banks circumvented this difficulty in the good old American way – they lied about it.  The coursts were not amused.  And now the attorneys general of all 50 states are ginning up a class-action lawsuit to try to get lenders back for this.

Get them back for what is not clear, because there are maybe six reported cases – nationwide – of a lender foreclosing on someone that really wasn’t behind on his mortgage, and those situations are fairly simply remedied by the parties involved.  The real-estate market in the US is not what one would term “robust” at the moment, and the prospect of a gigantic class-action lawsuit, coupled with the blizzard of punitive follow-on lawsuits (this is America, after all) has the very real prospect of bringing the market to a halt altogether.  If lenders have to retask all their personnel to handle lawsuits, that, coupled with the dramatically increased risk of not being able to foreclose at all on any of their loans (this is what Senate Majority Leader Harry Reid, among others, is calling for), is going to dry up the feeble trickle of mortgage money we now have.

Ms. Bair sees this clearly, and has a solution: modify the mortgages.  Well, we are, say the lenders.  No, you’re not, says Madam Bair, and she’s right.  Banks have not been modifying mortgages at nearly the anticipated rate.  And Ms. Bair has a couple of other data points to provide.  The FDIC owns several banks, and has been working out modifications on its own on behalf of those banks.  In the cases where the modifications have resulted in a 10-40% reduction in the monthly payment, the default rate has been halved, she says.

Think of that!  Reduce the homeowner’s payment, and he doesn’t default on his loan as often.  This is so amazing (in my family, we say amazingcastic, just in case anyone misses the sarcasm) that only the government could possibly have figured it out.

As goo d an idea as this is, there are a couple of problems with this idea of Ms. Bair’s.  The first is more of a hurdle that can be jumped with the right incentives.  That is that the mortgages themselves, as we noted here, are of dubious and often multiple ownership.   Not only do we have to figure out how to identify the owners, we then have to get them all to agree to modify the note, which is the security that the ownership is based on.  Not an easy task, though presumably possible if the incentives are correct.  But that brings us squarely to the second problem, and that is that the incentives are screwed up.

Banks could already have been modifying mortgages by the basketful if there were solid incentive for them to do so.  But that incentive is lacking, in most cases.  The government’s mod plan is cumbersome and weak, with incentives that are far too small to move most lenders to action.  Adding to that, the government – specifically the FDIC – requires a certain asset book from each lender or it will be “stress-tested” out of existence.  The assets on that book consist largely of mortgage notes.  Modify the notes, reducing their value, and the FDIC has the ability to swoop in and declare you bankrupt.  That’s not an incentive to acquiesce to Ms. Bair’s request.  On top of that, the government has all-too-often indicated that it will step in and bail out the banks if they lose money because of foreclosures.  Fannie and Freddie, VA and FHA already own 90% of the US market for mortgages, and that group can always tap the taxpayers if it gets in trouble.  So why modify?

It might be moot anyway. Here’s the quote from the attorneys general in response to Ms. Bair:

Our group of attorneys general and banking regulators is currently looking into the foreclosure problems that have come to light.  In addition to our active inquiries with servicers and lending institutions, we are engaged in extensive dialogue.  We will continue that dialogue with those inside and outside of our multistate group to ensure this process is both thorough and expeditious.  We intend to be fair to consumers, lenders, and investors, and continued input and dialogue will help us attain that objective.

Anytime you say the word “dialogue” three times in one paragraph, you’re spinning.  Let me translate that quote for you, as I speak politics fluently:

We’re elected officials.  Most of us are up for election this year.  We’ll sue the living snot out of you if it will help us keep our jobs.

Despite all this, I wish Ms. Bair well.  I’ve been calling for an across-the-board principal reduction, as a gift from the lenders to the homeowners, as a way of eliminating “strategic foreclosures” (where the homeowner can make the payments but walks away because he doesn’t want to, usually because he is upside-down in the house).  Ms. Bair’s proposal along with something like that would reduce foreclosure rates by as much as 65%, and put a serious floor under the housing market.  It would mean a freeing up of hundreds of billions of dollars of trapped capital in homes that are currently underwater, boosting purchasing power and pouring more billions into consumers pockets (not, this time, government billions, which it has to take from consumers anyway) at a time when that is sorely needed.

Will the proposal founder on the twin rocks of politics and regulatory constriction?  Will you ever have a lender call you and say, “you know, let’s see if we can make this mortgage thing work a little better for both of us”?  Well, we’re coming into the season of miracles.  What better time to see one in housing?

At the very least, if you’re a homeowner that is behind on the mortgage – or even threatening to be so – you ought to call your lender and “dialogue” with them.  It appears that they have new incentive to talk with you.  And we’ll keep you posted here as all this develops.

The topic of immigration reform is having a polarizing effect on the nation. It sparks interesting debate on both sides of the issue. I know, I know, my grasp of the obvious is legend! What isn’t quite as obvious is how it could have an effect on mortgage lending, specifically re-financing.

We know how FHA views insuring loans for lawful permanent and non-permanent resident aliens.

FHA Guidelines For Legal Permanent Resident Aliens

For people who have been granted permanent resident alien status, FHA will insure their loan under the same conditions as people who are US citizens. The lender is required to document that the borrower is a permanent resident alien in the loan application and evidence of permanent residency must be provided.

FHA Guidelines For Legal Non-Permanent Resident Aliens

FHA will even insure a mortgage made to non-permanent resident aliens as long as the borrower is going to occupy the property as their primary residence and the borrower has a valid social security number. If the borrower has less than one year of history of having their non-permanent status renewed, it is up to the lender to determine the likelihood that the borrower will be granted a continuation with the US Government. So as to the question whether or not a resident alien can receive FHA insured loans:

Yes, FHA will insure the loans as outlined above for both lawful permanent resident aliens and non-permanent resident aliens.

Yes, there are lenders who will loan money to lawful permanent or non-permanent resident aliens.

What About Illegal Residents?

This is a legitimate question that doesn’t seem to receive any of the media attention that swells around the bigger issue of illegal residents:

What about all of those people who financed homes with “fake” social security numbers in the late 1990′s or early 2000′s who are currently making their payments but cannot refinance due to the updated qualification verification?

I don’t have an official estimate, I would guess there could be many, many, many people who are currently residing in homes that were financed with dubious SS documentation provided to lenders prior to the current database verification process. This could certainly prevent them from being able to re-finance.