Ever heard of LoanStream based in Southern California?

Question

hi everyone. So I need help with this one. I went through the process of getting prequal to take cash out of one of my rental properties. I was told LoanStream was an asset based lender and that as long as I owned 4 single family homes (which i do) I'd be ok to get the loan. My hubby and I have perfect credit (which they ran $20) and the appraisal on the property we are looking to take cash out of came back valued at DOUBLE then what we paid for it (in all cash.) we paid )155k and want to take out 150k and it appraided at $300k ( we paid $550.00 to LS for appraisal).

I told LS upfront I do not want our credit ran or to pay for an appraisal unless based on all of the documents they requested (w2's, rental agreements, tax returns, pay stubs, mortgages, debt, etc) was reviewed by underwriting and that we would have no problem getting the cash out of this property. They said they ran it by underwriting and everything looks great and they would do this deal "all day every day"..... Well... My hubby and I got delayed with other things and let them know that and they said no prob. That our rate lock was good for 20 more days and we are already in underwriting that they just need us to send in letter of explaination ( for my hubby's identity theft that happened to him last year).Last correspondance with them is we were ready to close once we gave them the LOE's.... Well we finally were ready to move forward so I emailed LS back and no response. I called and emailed and didn't get a response for a week! Well I finally got a hold of the loan manager and after getting the runaround said we do not qualify bc of our income to debt ratio ( because one of rental incomes comes from a guest house we rent out on our primary residence).

A few questions:

1. Is this legal what LS did?

2. I provided them all of this information up front (including that one of the rental properties was not on the past tax return)

3. Does a rate lock expire 20 calendar day or 20 business days?

4. Has anyone ever worked with or heard of LoanStream before?

Thank you all in advance.

Chris Mason · Answer

(1) Not a lawyer. You were lied to with the underwriting thing. It's shocking how many deals I pick up, fix, and close, because someone was told what you were told.

(2) Loan officer screwed up. This is why relationships and knowing the people you are working with is key in real estate. People interview and screen their tenants, realtors, painters, contractors, etc, for competence/trustworthiness/etc. No idea why they work with the first dummy that picks up the phone at a 1-800 number for these several hundred thousand dollar transactions that we call 'mortgages.' Anyways, I'd be curious if adding back depreciation on your rentals that do show up on tax returns, and/or documenting expenses (repairs, rehab, etc) that were one-time expenses and not recurring, could be a fix.

(3) Calendar

(4) No

Chris Mason · Answer

(1) Ask them to show you their math. You won't necessarily know/understand it all, but it'll give you an idea of the attention to detail (or lack thereof) being applied to your situation, and let you know that someone isn't just throwing spaghetti (and your appraisal fee) at the wall and hoping something sticks.

(2) Only a self-serving one. :P