All Forum Posts by: Jesse Gonzalez

I've never heard of this, I just checked the fannie mae selling guide and there's no reference to frequency or limitation of applications. I think this may be a requirement of your individual loan officer's company. Shop around.

I'm in Sonoma County and would help you if needed, but I believe you can go to their website and pick up broker's in your area that way.

I've experienced this exact same thing happening with a refinance I was involved with. Common sense dictates that you should only be hit for 50% of the mortgage expense. The first lender that the loan was submitted to rejected the loan for the same reasons you reference above, but the loan was resubmitted to another lender and they underwrote the deal differently and it was accepted. Just shop around and explain up front what the deal is and you should get an answer that satisfies. @Kevin Romines also has a good suggestion regarding asking for the specific guidelines the lender is using.

With an FHA loan the wait period for Chapter 7 BK is 2 years so it sounds like you're fine there if you were willing to live in the property as your primary residence.

From the fha guidelines, "The table below describes the exception situations in which FHA does not

object to borrowers obtaining multiple FHA-insured mortgages.

Note: To determine the eligibility of a borrower for one of the exceptions in

the table below, the underwriter must consider the

· length of time the previous property was owned by the borrower, and

· circumstances that compel the borrower to purchase another residence with

an FHA-insured mortgage.

Important: In all cases other than those listed below, the borrower is not

eligible to acquire another FHA-insured mortgage until he/she has either

· paid off the FHA-insured mortgage on the previous residence, or

· terminated ownership of that residence."

You need to go to the source, which is what I've done for you. This is straight out of the HUD guidebook for FHA loans. These are true guidelines.

2. Eligibility Requirements for Principal Residences

4155.1 4.B.2.d Exceptions to the FHA Policy Limiting the Number of Mortgages Per Borrower

The table below describes the exception situations in which FHA does not

object to borrowers obtaining multiple FHA-insured mortgages.

Note: To determine the eligibility of a borrower for one of the exceptions in

the table below, the underwriter must consider the

· length of time the previous property was owned by the borrower, and

· circumstances that compel the borrower to purchase another residence with

an FHA-insured mortgage.

Important: In all cases other than those listed below, the borrower is not

eligible to acquire another FHA-insured mortgage until he/she has either

· paid off the FHA-insured mortgage on the previous residence, or

· terminated ownership of that residence.

Policy Exception Eligibility Requirements

Relocation- A borrower may be eligible to obtain another FHA-insured

mortgage without being required to sell an existing property

covered by an FHA-insured mortgage if the borrower is

· relocating, and

· establishing residency in an area outside reasonable commuting

distance from his/her current principal residence.

If the borrower subsequently returns to the area where he/she owns

a property with an FHA-insured mortgage, he/she is not required to

re-establish primary residency in that property in order to be

eligible for another FHA-insured mortgage.

Note: The relocation need not be employer-mandated to qualify

for this exception.

Continued on next page

Chapter 4, Section B HUD 4155.1

4-B-8

Increase in family size-A borrower may be eligible for another home with an FHA-insured

mortgage if the number of his/her legal dependents increases to the

point that the present house no longer meets the family’s needs.

The borrower must provide satisfactory evidence

· of the increase in dependents and the property’s failure to meet

family needs, and

· that the Loan-To-Value (LTV) ratio equals 75% or less, based on

the outstanding mortgage balance and a current appraisal. If not,

the borrower must pay the loan down to 75% LTV or less.

Note: A current residential appraisal must be used to determine

LTV compliance. Tax assessments and market analyses by real

estate brokers are not acceptable proof of LTV compliance.

Vacating a jointly owned property-A borrower may be eligible for another FHA-insured mortgage if he/she is vacating a residence that will remain occupied by a coborrower. Example: A couple is divorcing and the vacating ex-spouse will

purchase a new home.

Non-occupying coborrower-A borrower may be qualified for an FHA-insured mortgage on

his/her own principal residence even if he/she is a non-occupying

coborrower with a joint interest in a property being purchased by

other family members as their principal residence with an FHAinsured

mortgage.

One way to work around this is to not list any assets on the loan application. If the lender or broker gets an approval through fannie mae's automated underwriting engine without any assets listed on the 1003(loan application), then the lender will not ask you for bank statements and you will be able to work around the letter of explanation BS that comes with a loan in today's market.

Fannie Mae will hit you with 1.75%-3% in cost right off the bat for an investment property. You'll also have title and escrow fees which will be around $1500 in california on a loan amount 250-450K. 5.25% is a little higher than market right now on an investment property, but its still pretty good. You'd really need to run the numbers to see if the overall interest savings on a new loan would exceed the total cost. That's a personal decision but you could figure it out pretty quickly with a mortgage calculator.

@Jordan L.

I'm a mortgage broker and I can tell you that multiple inquiries should not affect your credit score. This is an excerpt directly from myfico.com, "most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score."

Also, if you work with one bank, one lender only, then you're stuck with their rates and pricing for those rates. If you work with a broker who has access to 50 lenders then they will shop for the best rate for you which is much more in your favor and believe me it makes a big difference. As broker's we are subject to strict compensation guidelines that are more stringent than banks too so that works out well for you in most cases. Best of luck.

@J Scott

You're correct.