Notes underwritten with Itin numbers less valuable?

Question

I work for a mortgage company and we underwrite private notes for investors One of our programs is that we underwrite for owner occupants with iTIN numbers. Are these notes discounted more than other notes even though they are superbly underwritten?

Sushil Sureka · Answer

We have purchased notes on assets for owner occupants with iTIN numbers. We did not ask for larger discount as we solely based our decision off of the asset quality and margin of safety in terms of vested equity. That may not be the case for institutional level note buyers, but we certainly did not care.

Freddie don't purchase these loans, so I can see stigma attached with these loans.

I know it does not provide the answer you are looking for, but just wanted to give my perspective.

Freddie don't purchase these loans, so I can see stigma attached with these loans.

I know it does not provide the answer you are looking for, but just wanted to give my perspective.

Account Closed · Answer

Thank you that was the information I was looking for

Bruce Lynn · Answer

I do not invest in notes, but I would think any investment would be not only based on return, but based on risk.  So someone would have to do some kind of risk profile on loans with ITIN numbers to be sure, but I would think there should be some discount.  There should be more risk versus a loan with same numbers in all other places but with SSN.  I would think job security would be riskier and right to stay and work is risker and therefore ability to repay is higher risk and that you would want to factor that in your pricing.  How much discount?  That's the question.

Pavel Reyes Valdes · Answer

I came across this post while looking for a lender who can do loans for people with ITIN number. I've been approached by several potential clients, but have been unsuccessful finding a lender who does it. That lender needs to be licensed in Kentucky.

Scott L. · Answer

Just a guess but ITIN numbers generally used by non-immigrant aliens ineligible for a SSN. If the underwriting is sound, then no reason why the notes should be riskier.  However, owner-occupied suggests longer term residence not typically granted to the classes of non-immigrant visas that don't allow for SSN issue. To be less politically correct, they are often used by illegal aliens. Since illegals are subject to deportation they may not be as superbly underwritten as suggested. On the other hand there are some categories of non-immigrant aliens that could occupy property in the US,  though they are generally limited to 182 days a year or less in the US.

Notes underwritten with Itin numbers less valuable?

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