Stated Income Loan

12 Replies

My partners and I are really just getting started with investing.  This year we have acquired four multi-unit properties.  We purchased with the help of investors and little to no money out of our pockets.  Since we are new are funds and reserves are limited to improve properties as tenants move on.  We are looking for someone who might be willing to either give a stated income loan, line of credit, or another type of loan.

Can you guys recommend someone that might able to help us out? 

I have been talking to the guys at Marshall Reddick and they seem to be pretty good. I have not invested with them yet but am thinking about it. 

Another one I can across this morning while doing some research is Norada. Here is the link: http://www.noradarealestate.com/blog/stated-income.. I do not know them and have not used these guys. Just sharing my research. 

Hope this helps and gives you a starting point.

@Ritesh Dalal --  thanks for the mention. 

@Ryan Wattenschaidt -- Although we don't originate the loans, we do work with a number of lenders that offer stated-income loan products.  You are always better off getting conventional financing if/when possible.  They will have the most favorable terms for you.  After that there are various portfolio lenders that can help you.  The stated-income loans are the last option to consider.

Continued success!

@Ritesh Dalal  

@Ryan Wattenschaidt

I got introduced to Marco of Norada by a respected friend of mine. I called and spoke to him a couple of times and he did refer me to one of their financing patners who was very helpful. Although I have not taken any offer from them yet, they were very professional and helpul.

Marco also provided a lot of guidance as I was relatively new to REI.

Hope you find this helpful....

@Ryan Wattenschaidt There are stated income products out there that offer more of a traditional term of financing, as in a 30 Year Fixed option. They come at a higher rate, but that can always be bought down. It all comes down to investment strategy and stability of the property. If a diamond falls into your lap and guarantees a healthy cash flow and you need it fast, sometimes stated is the way to go. 
You'd still need to come up with at least 20% for your down payments, but it seems like you've got that covered with investors.

I see scenarios like this all the time where the investor stumbles upon a MUST HAVE property and doesn't have enough time to pull the resources together. There are many variables to consider when going with stated income, but if you do your due diligence on the subject properties, you can come out on top!

Originally posted by @Andrew Syrios :

I'm surprised lenders still offer stated income loans after 2008 to be honest.

 It's because Wall Street is buying this trash again. On top of that, some of these lenders are getting ridiculous and flirting with the fact that Dodd-Frank is barely being enforced, CFPB at this point is basically asleep at the wheel. Take a look at this from my inbox just 20 minutes ago, tell me how many alarm bells are going off in your head (starting w/ that freaking subject line, two alarm bells right there!), and how much you think they're over-promising with the below solicitation for my brokered business (CFPB may be asleep at the wheel, but California's state regulators certainly aren't, so I'm not touching this with a 10 foot pole). 

Fortunately these types of things are a very very small part of the overall mortgage market today.

Meanwhile, I think I'll just stick to full doc 30YF and a good rate with low fees. Plenty enough of that business out there to keep me busy. :)

Originally posted by @Chris Mason :
Originally posted by @Andrew Syrios:

I'm surprised lenders still offer stated income loans after 2008 to be honest.

 It's because Wall Street is buying this trash again. On top of that, some of these lenders are getting ridiculous and flirting with the fact that Dodd-Frank is barely being enforced, CFPB at this point is basically asleep at the wheel. Take a look at this from my inbox just 20 minutes ago, tell me how many alarm bells are going off in your head (starting w/ that freaking subject line, two alarm bells right there!), and how much you think they're over-promising with the below solicitation for my brokered business (CFPB may be asleep at the wheel, but California's state regulators certainly aren't, so I'm not touching this with a 10 foot pole). 

Fortunately these types of things are a very very small part of the overall mortgage market today.

Meanwhile, I think I'll just stick to full doc 30YF and a good rate with low fees. Plenty enough of that business out there to keep me busy. :)

"No Income, No Reserves" Oh God...

Is NORO the new NINJA???

They offer the loan, but they are so hard to close and take forever. All non qm loans take forever to close. I have submitted a couple now and only closed one.  The other 2 fell apart because of timeline.  If you going to do a stated income make sure you write 60 days closing and you going to use every day of it.  If you write an offer and put 30 days closing using stated income you are just setting yourself up for pain, anger and failure.

Originally posted by @Tim Johnson :

They offer the loan, but they are so hard to close and take forever. All non qm loans take forever to close. I have submitted a couple now and only closed one.  The other 2 fell apart because of timeline.  If you going to do a stated income make sure you write 60 days closing and you going to use every day of it.  If you write an offer and put 30 days closing using stated income you are just setting yourself up for pain, anger and failure.

 That's a part of why I stopped doing non-qm. I went into it all excited about being able to help put more people into homes or rental homes.

It's really hard to swallow that one of these is 5x the work of a "vanilla" mortgage. Not really viable to do that and NOT expect service levels for other clients to drop. And then on top of that, the actual closing ratio like you've experienced is really low. And the final nail in the coffin is that even after you do all that extra work and get to the closing table, the homeowner/investor is going think you ripped them off on the rate/fees when really that truly is the best you could do, given the lack of Fannie Mae subsidy. Sucks, but have to pass on the entire product line.

@Chris Mason

I think it has to with poor training from the lenders, In my brief experience the underwriters don't understand the product and ask for typical docs when its not required by the loan guidelines.

Also staff levels are so low with the non qm and experience levels. On the one I closed it was a foreign national and I went back and forth with them about how the borrower doesn't have a US credit score.  In the guidelines it clearly says they loan to non US credit score, but they need 24 months of primary mortgage history and was all documented on the upload with cleared checks from the borrowers account.  Almost 2 months to clear that condition.  Then my underwriter couldn't figure out to make a CD so I had to teach him how to do it

I truly wish it would work, but your 100% correct, taking loans to major wholesale guys is way easier and less work. 

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