Bellingham, WA · Member since 2009 · 31 posts · 1 vote
Successfully Closed Back-to-Back Closings
End Buyer’s Lenders List
Wachovia
Key Bank
Tower Federal Credit Union, Pennsylvania
Wells Fargo
Equity Home Mortgage
SunTrust Mortgage
Contour Mortgage Corp.
Countrywide Mortgage
Flagstar
First Interstate Financial
Third Federal
Home Savings
Provident
Chase Bank
GMAC
The biggest problem we are all facing surrounding seasoning is the rules change on a daily basis.
As a flash cash lender we are involved in 100's of transactions per month ( nationally ) and have done quite a bit of research on the subject. So here's what we have found, please understand this is a moving target and may change by the time you read this.
Loan/Lender Seasoning
1) FHA has a 90 day seasoning requirement. FHA guidelines say 90 days starting at conveyance date, however every lender I know of goes of recording date.(Technically, you can get an exception from SOME lenders if the recording is delayed, they can go of closing date, but then you have to give them the hud an closing docs to prove it, which you may not want to do).
2) Fannie & Freddie have NO official seasoning requirements in their guideline as of yet. (Rumor has it both are publishing new guidelines in the next few months and this may change, we'll have to wait and see). However, all the major lenders I know of has imposed their own guidelines on top, requiring anywhere from 1-180 day seasoning. The seasoning issue can even vary by the various underwriters in the same company.
3) VA & USDA have NO seasoning requirements.
Lenders to consider
I agree with Ryan. I have seen the best success with local CU's and regional/small banks. The other one to consider is Correspondent Brokers. Basically you are looking for people who underwrite in house and sell the paper to the big boys based on the guidelines. I have noticed lately even the correspondent brokers are starting to tighten up.
Change in communication is suggested.
We tell all our clients to stop using the terms "Double Close", "Back2Back Close" and "Simultaneous Close" if you are using flash cash to close your deals.
Here's why, when banks, loan officers, realtors, etc hear these terms, they all think there is something fishy/illegal going on (check with your state laws to make sure it's okay to do these). Let's face it, nobody other than an investor truly understands what this means so why confuse things. Our position is simply, "I'm an investor and I will be buying the property with cash, and I will be reselling it shortly after. I may go on title as late as the day of sale depending on how long it take to get the closing & recordings done. These will be 2 completely separate transactions." I also make sure title prepares a 12 months chain of title showing I am scheduled to take title prior to the projected closing date for their transaction.
By taking this approach, it tells the lender and everyone involved that there is nothing tricky going on here and you are not using the buyers funds to purchase the property (which is a big issue right now), also shows the b side lender that you will have ownership of the property prior to the sale to the end buyer. We have had great luck with this strategy for Conventional buyers, but it's not 100%. This does NOT work for FHA.
Land Trust comment
Using a land trust does not "eliminate" a break in the chain of title. When you transfer the property into the trust, the chain will reflect that transfer. So then any seasoning starts as of that date. Which would be considerably early than the date of a option or sales contract. So it may shorten your waiting period. Each state differs on the requirements surrounding "Trusts" so do you research. Also note that some lenders will not funds transactions that are coming out of a trust.
Suggestion
Find a local bank/broker that is willing to fund the transactions, again watch your terminology. There isn't a lender on the planet that wants to hear you are going to be using their funds to buy the property on the a side. Then direct your buyers to them. Lenders are out there willing to do it, but how you present it is critical.
Hope this helps.
Dave Williams
Investors Choice Funding
Make sure your buyer is not FHA/VA. I think with the list that you provided you are looking at FNMA (Fanne Mae) qualified borrowers only.
And since that is the case, you don't need a list of lenders. Literally anyone that is in any form of lending could write a FNMA qualified borrower's loan.
Sorry USDA, not usrda. A local loan officer can put you in this - theres two kinds - direct funded, and guranteed, depending on income - must be low or moderate ( but they are flexible - here under 95k is considered moderate for family of 1-4) Mostly first timers or if you can prove lack of adequate housing. 29/41 ratio ( or higher with credit), down to 500's in credit, can NOT have funds to close normally. Zero down, no pmi, great rates, seller concessions are fine, the loan is fantastic. Takes forever to underwrite, but hey thats a small price.
http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do
Steve and Minna:
Which lenders do NOT require that the non-foreclsoing Seller be on title for at least 90 days? I realize this is a FHA rule but I am finding it is applied/"layered" on USDA loans by Chase and Wells to name 2. Help! Thanks.
If the buyer is low income usda will loan direct - if the loan will just be backed by the usda (moderate income) then the lender in front will also need no seasoning. Call a local mortgage broker and ask around.
I have a pre-approval (yeah, I know it means nothing) for an end-buyer from Wells Fargo. We called, and they said that they require 6 months ownership seasoning from the seller.
I have the same theme. An acceptance letter from Wells Fargo for the short sale and the end buyer is pre-approved with Wells Fargo. Conventional loan and they require 6 months on deed. Help. I have less than 1 month to close.
[quoteI have the same theme. An acceptance letter from Wells Fargo for the short sale and the end buyer is pre-approved with Wells Fargo. Conventional loan and they require 6 months on deed. Help. I have less than 1 month to close.
Start calling your small local banks and ask if they lend on 24 hour seasoning.
Do your research on back to back closings using a land trust. The land trust will eliminate the break in chain of title and will remove your issue of title seasoning.
The biggest problem we are all facing surrounding seasoning is the rules change on a daily basis.
As a flash cash lender we are involved in 100's of transactions per month ( nationally ) and have done quite a bit of research on the subject. So here's what we have found, please understand this is a moving target and may change by the time you read this.
Loan/Lender Seasoning
1) FHA has a 90 day seasoning requirement. FHA guidelines say 90 days starting at conveyance date, however every lender I know of goes of recording date.(Technically, you can get an exception from SOME lenders if the recording is delayed, they can go of closing date, but then you have to give them the hud an closing docs to prove it, which you may not want to do).
2) Fannie & Freddie have NO official seasoning requirements in their guideline as of yet. (Rumor has it both are publishing new guidelines in the next few months and this may change, we'll have to wait and see). However, all the major lenders I know of has imposed their own guidelines on top, requiring anywhere from 1-180 day seasoning. The seasoning issue can even vary by the various underwriters in the same company.
3) VA & USDA have NO seasoning requirements.
Lenders to consider
I agree with Ryan. I have seen the best success with local CU's and regional/small banks. The other one to consider is Correspondent Brokers. Basically you are looking for people who underwrite in house and sell the paper to the big boys based on the guidelines. I have noticed lately even the correspondent brokers are starting to tighten up.
Change in communication is suggested.
We tell all our clients to stop using the terms "Double Close", "Back2Back Close" and "Simultaneous Close" if you are using flash cash to close your deals.
Here's why, when banks, loan officers, realtors, etc hear these terms, they all think there is something fishy/illegal going on (check with your state laws to make sure it's okay to do these). Let's face it, nobody other than an investor truly understands what this means so why confuse things. Our position is simply, "I'm an investor and I will be buying the property with cash, and I will be reselling it shortly after. I may go on title as late as the day of sale depending on how long it take to get the closing & recordings done. These will be 2 completely separate transactions." I also make sure title prepares a 12 months chain of title showing I am scheduled to take title prior to the projected closing date for their transaction.
By taking this approach, it tells the lender and everyone involved that there is nothing tricky going on here and you are not using the buyers funds to purchase the property (which is a big issue right now), also shows the b side lender that you will have ownership of the property prior to the sale to the end buyer. We have had great luck with this strategy for Conventional buyers, but it's not 100%. This does NOT work for FHA.
Land Trust comment
Using a land trust does not "eliminate" a break in the chain of title. When you transfer the property into the trust, the chain will reflect that transfer. So then any seasoning starts as of that date. Which would be considerably early than the date of a option or sales contract. So it may shorten your waiting period. Each state differs on the requirements surrounding "Trusts" so do you research. Also note that some lenders will not funds transactions that are coming out of a trust.
Suggestion
Find a local bank/broker that is willing to fund the transactions, again watch your terminology. There isn't a lender on the planet that wants to hear you are going to be using their funds to buy the property on the a side. Then direct your buyers to them. Lenders are out there willing to do it, but how you present it is critical.
Hope this helps.
Dave Williams
Investors Choice Funding
I talked to Flagstar yesterday. The wholesale side says that they require 90 days seasoning, but they might make an exception with an LOE.
Flagstar's retail side said that there is NO seasoning requirement. And the guy seemed to know exactly what I was talking about, so he wasn't a dummy rep either.
I called many local credit unions like Justin suggested....and they don't seem to have these requirements neither.
I have notice Flagstar funding a lot of deals over the last month or two. I'm surpised with Wells Farg, I wonder if it is certain loan types?? Welss Funded a B to C 3 weeks ago on a closing I funded the A to B. I see a lot of credit unions being used as well.
I work for Wells Fargo. The 180 days seasoning requirement is correct for conventional loans at the time of this post.
We underwrite most of our loans based on Freddie Mac guidelines, even though we sell some loans to Fannie Mae as well. Freddie Mac loans are typically more strict than Fannie Mae. As such, the loans that are written to Freddie Mac standards are saleable to both Freddie and Fannie, where the Fannie Underwritten loans for the most part are not saleable to to Freddie Mac. It just gives us more ability to sell loans in the secondary market. I have not been able to do a loan for a a title seasoned less than 90 days for a conventional loan, however, I believe our Home Equity product does not require seasoning, but the C buyer in that case would most like have to have 20-30% down payment.