All Forum Posts by: Chris Mason

Insufficient information, really. DSCR could be 0.8 for all we know, in which case OP is lucky to get any loan at all. Also, no mention of fees, fico score, property details, etc.

No idea, never heard of them.

But who names their company after the Wolf of Wall Street company, even using their lion logo? The film isn't supposed to be a how-to guide....

Just go get it done, then refinance later on when rates drop (as part of the 40+ year pattern).

 I mean, if that were the case, so be it. It could just be a rule that you can't refinance if you plan on moving in a year. And if that were the rule, printed in black and white, that would be totally fine. 

It's the gray area matrix glitch stuff that is annoying. 

 Yeah, but it's actually a glitch in the matrix. At a company I used to be at, I had a hyper-rule-follower-borrower who was refinancing their primary residence they intended to move out of in a few months in order to convert it to a rental. So they wanted to do it as an investment property mortgage, thinking they are being good rule followers, right? I pushed back, they insisted. It's their loan application and their signature on all that paperwork, so ultimately they are the boss, and I did as requested. Submitted it as an investment property mortgage. 

The underwriter suspended it, and dressed me down, saying that giving the investment property interest rate to someone currently living at the property in question was abusive and predatory (the UW assumed it was my idea). But our hyper rule follower borrower didn't want to put themselves in a position of possibly being accused of mortgage fraud in the future. So the refinance applicant withdrew the loan application entirely, because neither of these two parties was willing to budge (LOL @ how rare this was, we had the consumer insisting that they wanted a HIGHER interest rate, and the underwriter insisting that they are REQUIRED to get the LOWER interest rate!).

So even if OP had tried to go the route suggested ("if you aren't going to live there for a year, then it's an investment property, rather than owner occupied"), that wouldn't have guaranteed a positive outcome. 

Glitch in the matrix. 

 No issue, you're fine, you fulfilled your owner occupancy promise and didn't commit fraud. 

 Your friend didn't tell you the whole story. No one ever does. The person with bad credit never takes responsibility for that fact, they blame it on the car salesman who ran his credit 10 times, for example. They don't tell you about the car repo and pattern of missing credit card payments.

As others mentioned, one possibility is that it was a HELOC. In that case, that is the whole story, HELOCs got called, it happened. In 2020, the availability of new HELOCs plummeted to nearly zero.

If it was a 1st position mortgage in 2009, it could be that they also started enforcing owner occupancy requirements. Remember the "stripper scene" in the Big Short where she said she owned 5 houses ("and a condo")? She probably bought all five as an owner occupant (chasing the lower down payment and better rates), months apart. So there's a really good chance that character would have had several mortgages called due when the SHTF. But she wouldn't tell you that she committed mortgage fraud several times in a row, she'd just say the banks are evil nefarious bad guys out to get her, etc (also, here's your excuse to watch the stripper scene again for, uh, research). 

 It's kind of a gray area rule. If you purchased that first house in July 2021 with the intent of moving out in less than a year, that's fraud.

However, if you moved in with that intent to live there a year, and something came up that you didn't anticipate, there are three possibilities.

1) It sails through underwriting, they don't even notice. Can't really plan for this, the "spaghetti strategy" isn't great when there's an earnest money deposit on the line. Cleared to close.

2) They do notice, and ask you to document your unforeseen circumstance. You could not have anticipated that your mother 150 miles away got terminal brain cancer, necessitating that you move closer to her for her last 6-9 months alive, for example, or that there's mold that wasn't disclosed, which is making your pregnant wife ill. Or you got a job transfer across the country. Cleared to close.

3) They do notice, and you talk about house hacking and numbers and cap rates and all that. Loan denied. 

A place like that, you're going to have local realtors telling their clients not to use you.

Example from just today: https://www.reddit.com/r/RealE... (note which comment is top-voted, that sub is obviously full of realtors)

Multiply that by a zillion realtors all over the country, all telling their clients NOT to work with you..

That being said, not a lot of people are hiring loan officers right now. So there's an argument to be made for taking what you can get. NFCU is probably a perfectly fine place to learn the basic mechanics of the job, so take their $20k/hr for that. As soon as you have that under your belt, GTFO and go to a local place in your own community. That's where you will learn how to work with local realtors (rather than being their enemy, which is all NFCU can teach you), drum up business yourself, and so on.

Also, fair warning. A place like that, they're going to focus on "how to use our software" as the mechanics of the job. Try to ignore that as much as possible, and focus on the math behind it. Software is dime a dozen, comes and goes, but math is math. 

That premise is flawed. DTI is calculated using monthly recurring liabilities, regardless of if they're on your credit or not. As anyone caught with an undisclosed child support obligation (typically not on credit in my state), paired with an otherwise borderline DTI, can attest to.