I was wondering if anyone had any recommendations of RMLO's (registered mortgage loan originator) that work with investors to originate loans for subject-to wrap deals.
Thanks for the help in advance.
It may help to find a LO who is well versed in few critical areas:
- knows their guidelines and has experience that can be obtained via recommendations, video recommendations, and vet the person online or from social circle /referrals/realtors/etc
- invests in real estate themselves and is familiar with your objectives and goals and knows the metrics and terms from which you are determining your objectives
- Not completely necessary but if they know how to read and coordinate a cash flow, income statement, and balance sheet it will help to coordinate your objectives as well
RE investors usually present more difficult files especially when the properties and businesses are numerous. A good understanding of accounting/finance and taxes and how they all work within your plan is crucial as well since how your taxes are filed will determine your ability to qualify in most cases.
This is a real problem as there are RMLOs dipping into this area and while they think they are experts and have a great spiel to sell the service, they are rather unaware of what they are doing and just plain dangerous.
Understand that new folks with no RE experience, much less the knowledge Albert spoke of, takes a 23 hour course and takes a test to obtain a license. No clue as to what prudent lending is about or what is deemed predatory lending.
The most important aspect is finding one with a crystal ball, they must look into the future and apply prudent lending assumptions, weigh probabilities od a borrower being able and willing to perform in the future, that means or includes meeting any refinance obligation, this is where most fail.
Putting someone in a financing contract where it is impossible to perform or unlikely under their circumstances is predatory lending.
The thinking is that the LO takes the liability, not really true as the note or obligation can be "crammed down" or reduced or totally eliminated, a note holder can lose big time. The note holder's recourse is against the dimwitted LO.
LOs familiar with the type of underwriting necessary will have been around over 15 years, as a MERS underwriting system was adopted making the older approach of prudent underwriting a lost art.
There are some RMLO forums on the internet, most all are in the conventional arena, you might find one there. While I know some exist, none here are qualified by knowledge, experience or education, but they did have a 23 hour course. If you want to bet your money on them, be my guest.
Don't get sucked in by claims of numbers of deal done, people can do things wrong a thousand times, it's the old, you don't know what you don't know. Then getting caught up with marketing hype of these deals. So, you really need to do your due diligence in finding a mortgage broker/RMLO.
Get references, then see if those references have any relationship with the LO,
Look to their last state audit and compliance exam, if they never had a compliance exam, move on.
Do they have the net worth to buy, at par, any loan they do that is non-compliant? Not bonds, but available cash and net worth.
If any broker is not willing to show their ability to carry through and back up their compliance requirements.....move on to another!
It's going to be tough, might be easier to change your strategy. :)
I've seen a lot of scenarios where a loan was structured wrong post closing by a past lender which costed the investor thousands in added costs or added risk to the viability of success. Most of the time it's not even malice though because the LO's own finances may not be that great either. They may be giving you the best advice they know with the best intention and of course we all know there are bad actors out there too. So I would definitely do you your due diligence a lot of people these days want to fall back on someone if things go wrong but why not self educate, gather some facts and become more informed so that when you meet with a loan officer you can quickly figure out if he or she is the type your looking to work with or not.
A good saying I heard the other day was that if you don't know what you value at the core then you'll most likely not find what you're looking for either.
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