At what point do banks treat me as a company instead of a person?

7 Replies

Hello,

I have an LLC that owns another LLC that owns a property outright. It's cashflowing nicely every month and yet, if I want a mortgage, the banks ask for my credit record. At what point do they start treating me as a business instead of a person, and look at my books instead of my credit record?

The reason I ask is because I don't have a credit record, I live abroad, I'm not a US person, so, this is completely hindering my ability to BRRRR. I'm trying to get creative with the financing but if I can't get a bank to give me a mortgage at some point, I'd have a lot of trouble making this work.

The problem is most banks that do mortgages sell their mortgages to loan buyers, Fannie Mae, Freddie Mac, other banks. One mortgage of mine of was sold to another bank 3 months after I got the mortgage, then sold to a 2nd bank a year later, and finally a loan service company handled it with the mortgage owner only identified by it's ID#. So I made payments first to the originating bank, then bank one, bank two, and finally an unidentified investor, all in a period of two to  three years.

The requirements of the banks are really the requirements of the loan buyers, mainly the borrower has to meet certain requirements, such as credit history, years on job etc. else the loan buyer will reject the mortgage. 

Banks don't want mortgages stuck on their books, they make more money selling the loans, pocketing the points to make other loans. Organizations like Fannie Mae buy the mortgages then bundled them where investors can buy them on the market as Fannie Mae unit trusts. For investors, they're touted as safe investments. I myself bought them, the trusts, some bundled at $25K, some in smaller units. 

Some years back, I heard of incidents where mortgages not meeting requirements were bought, bundled and then sold, and I wondered about the safety of these unit trusts. That was when we had the banking crises, the Federal government stepped in, poured billions of dollars in to save the banks and keep mortgages rolling. Appears things are now back to normal.

After all of this, I doubt they will entertain the idea of granting mortgages to people who live outside the country, no credit report history in the U.S.. Just too risky.

There are portfolio loans where banks keep the loans on the books that they can't sell. Small country banks keep it as an investment. I have several of them where REO banks sell properties at auction, then themselves provide the loans. Auction sales involves property sold as is, has title issues, and loan buyers reject them. Years ago, there are also "no doc" loans which I got, then banned, and now making a comeback. Back then, I had to call around for mortgage brokers to get leads on where to get these mortgages. Then, I started and owned businesses where I don't fit the normal credit profile and DTI.

So get hold of some mortgage brokers and see what's out there.

Originally posted by @J. Pablo Fernández :

@Frank Chin I guess the question is how do I get portfolio loans, how do I find these banks, when would they be happy to talk to me.

@Kris L. they are for single family homes.

Portfolio loans are usually offered by small country banks, usually unadvertised small unknown banks in small towns, and you'll have to find and call them up one by one. That's why I called up loan brokers more familiar with the landscape. In my case, for the no doc loan, I found it after calling half a dozen loan brokers. Problem is they charge a fee if they arrange a successful loan, though in my case, it was waived.

 

I have built a list of lenders, gleaning from BP.  There aren't that many that I've found, but if others pm me, I'll add other lenders to the list.  Thanks!

I'll select a few I see that say "foreign national" program.  You are looking for "direct lenders" that also do foreign national lending.

Civic

Corevest

Caliber

Citadel

Deephaven Mortgage

@J. Pablo Fernández you've got some good information above but your main challenge here will be that you are not a US citizen.  However, there is a "foreign investors buying in US" forum that I would suggest to post in here on Bigger Pockets.  If you were a US Citizen it would be very easy to get a loan but you will need to do some searching since this would not apply to you.  Post in that forum and see if some other foreign investors can point you in the right direction.  Good luck!

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