Cash Out Investment Property Refinancing???

Question

Is anyone still able to find Cash Out Refinancing on Investment Properties? I was in the last stages of underwriting and was already approved to close when COVID hit full force. The lenders put everything on hold. Basically, they are unable to sell these loans on the secondary market...to my understanding. As of this week I am still getting the same answer, these lenders are in a holding pattern.

Is this what the BP Nation is experiencing as well or am I missing something?

Steven Gough · Answer

Hello Kris

Thanks for the feedback.  That is what I am hearing as well.  It does sound like some options are slowly creeping back in...I just have to be patient.  I will look into my local banks but their interest rates tend to be higher.  Did you find that to be true with the 3 properties you closed on this morning?  Congratulations on that, by the way!!

Kris Mann · Answer

@Steven Gough, I just closed cash-out refis on 3 properties this morning with a local bank. But I heard that private lenders have been very tight. I am quoting verbatim from an email I received from a broker who specializes in investor loans:

"It's been a very volatile period over the last few months in the wake of Covid-19.  Since these types of mortgages are not backed by the government like Fannie/Freddie conventional products they rely on secondary market buyers on Wall St. for liquidity. When the stock market tanked as states/cities enforced stay at home orders and forced businesses to close, the appetite for these loans dried up immediately over night on the secondary market. Lenders are stuck with tons of loans that they cannot offload. This resulted in nearly every Non QM/Commercial lender suspending operations as well as conventional loans being hit with very tight overlays in an effort to survive the tsunami of forbearance requests.  We're just now beginning to see many of these programs creep back into the market although at much more conservative terms than prior."