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New Year – New Regulations Loan Structure in My Office

 

LENDER’S VIEWPOINT
by Broker, Forest Tardibuono

New Year – New Regulations Loan Structure in My Office

I want this article to be nothing but positive, because that is my attitude going in to this new year in the face of new regulations.  A lot of new regulations.  Tons of new regulations.  More friggin’ regulations than you can shake a stick at.  But I digress.

I just read that the new laws regarding loan originator compensation are 541 pages!  Sorry, digressing again.

I only do Hard Money loans.  They break out into 2 rough categories – Owner Occupied Principal Residence and Investor loans.  Investor loans is the broader category because an investor is someone who is buying or refinancing something other than an owner occupied principal residence, be it land, commercial or mixed use property.

My strength is in loan amounts around $400,000 or less.  I do larger loans on what I deem a case by case basis.  I have gotten many, many loans over $400,000 done, but the real sweet spot with my investors is $400,000 and under.

Rates in my office for both owner occupied and investor loans vary according to the loan to value.  The higher the loan to value the higher the rate.  I will lend as high as 75% loan to value but more normally I lend to 70% loan to value.  So the higher rates in my office will be at those LTVs or loan to values.

Credit can affect the rate a Buyer or Borrower gets. If it’s really bad and fresh stuff – like a recent short Sale, foreclosure or bankruptcy, it can affect the rate.  Not always, but sometimes.

Income is now something the Feds have compelled us to look at for hard money, especially the owner occupied loans.  Debt ratios need to be under about 50% or there needs to be enough disposable income after paying all monthly debts.

That’s pretty much the structure in my office.  The complete line-up of available loan programs across the USA is a much shorter list than in years past.  There are A paper loans for borrowers who have good credit scores and good verifiable income.   And then there is Hard Money.  There used to be a lot of in-between programs like subprime loans, B and C paper, etc.  The in-betweens have virtually all gone away.

I can Pre-Approve someone in about 5 minutes and can write a Pre-Approved Letter right after doing the loan application. You can always call me and run your loan scenario by me.  I pick up the phone and I am really great with emails.

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with 25 years of experience in real estate and lending throughout Northern California. His phone number is (707) 523-2099. See regularly updated website @ www.sunpacmortgage.com.

Make the Winning Offer

 

Make the Winning Offer

Who doesn’t want to know how to beat out the other purchase contracts in today’s multiple offers and lower inventory markets, and buy that house!

There was a really good article in the Wall Street Journal recently about Hard Money loans.  It was informational to borrowers and investors alike.  It spoke of the fact that Hard Money loans will account for 1% of the 5.5 million home loans originated this year, up sharply from prior years.

It mentioned “Hard Money” filling an important void.  Look at just a few instances:

 

  1. You are 1 of 12 different offers with a highest-and-best counter, on a house you really want to live buy.  You have the ability to put down 30% of the purchase price and get pre-approved for a hard money loan with a quick call to a good local Hard Money Lender.  You remove loan contingencies, increase your earnest deposit and make a 15 day closing date and your offer gets accepted!  Now this is a scenario where you win and Hard Money can fund that loan!
  2. You just did a short sale on your home and want to buy another one.  Your favorite bank won’t even talk to you.  You know that prices are at rock bottom and you can buy the same home that you bought 5 years ago for $400,000 now priced at $250,000!  Hard Money can fund that loan!
  3. You lost your job and your credit is shot.  You now are back to work making the same money and you want to buy a house.  You’ve got 30% down.  No bank will touch you as your FICO score is 525.  Hard Money can fund that loan!

 

The Wall Street Journal article further states that the fees and rates are no doubt higher than a bank, but it is well worth it as “no bank is willing to listen.”

The real gist of this article is to not give up about buying a home; It just takes a strong and strategic offer to beat out all the others, despite not being the one with the most cash!

Even at Hard Money rates (some of which I’ve gotten funded as low as 9%)  its worth it because you’d be getting in at the bottom of the market and down the road could refinance to a 30-year fixed rate loan once qualified again.   Your gain from buying at the right time can offset the cost using Hard Money.

Take advantage of a Hard Money loan or help your potential Buyers succeed at getting into a new home by directing them to such versatile financing!

CREDIT – The Bane of Home Loan Approvals

 

CREDIT – The Bane of Home Loan Approvals

This aspect of qualifying for a home loan boils down to good credit versus bad credit.

The lenders left in the mortgage market arena, let’s call them institutional lenders, the ones that are offering the 30 year mortgages at historic low rates, require good credit (among other things).

Hard Money lenders allow bad credit. Institutional lenders will make you wait years after you have a bankruptcy, foreclosure or short sale before they will lend to you.

Hard money lenders will loan to you immediately after any of those events and even while you are going through them!

Same with recent credit problems including 30, 60, 90, 120 day lates, judgments and/or collection accounts.  Institutional lenders hate these.  Private money lenders can do a loan in spite of these.

Hard money lenders generally require just 2 things:

  1. Equity or a good down payment and
  2. Ability to repay the loan.

 

Look at the important role played by Hard Money:  Guy has a free and clear property.  He fell on some misfortune and his credit was damaged.  He makes plenty of money and he has no house payment.  He goes to his favorite bank where he’s been for 25 years.  Loan denied due to bad credit.  He calls a loan officer friend who works for a bigger bank who tells him he’s out of luck due to bad credit and to come see him in a couple of years.

This guy has a free and clear property and none of the institutional lenders will lend to him due to bad credit.   A Hard Money broker will do this loan!  There is equity and ability to repay.

Let’s say you have a happy couple who make good income and have saved up enough for a decent downn payment to buy a house.  They filed bankruptcy a year earlier which included a short sale so no bank will help them out.  Yet a Hard Money broker will do this loan as they have decent down payment and ability to repay!

This handles the credit aspect of a loan.  Give me a call today and let me help you and your Buyer(s).

How Can I Get A Home Loan?

Out of the Ashes…

 

LENDER’S VIEWPOINT
by CA Broker, Forest Tardibuono

Out of the Ashes…
I have empirical evidence of the real estate market recovery. Statistics I monitor that have seen a dramatic turn recently. It has me more excited about the recovery than housing sales.
My Past Borrowers are buying houses, and they are using Hard Money to do it. And it’s logical that they would.

Picture this, my office did over 400 loans annually up to 2005 when the market tanked. The average Borrower up until 2005 borrowed 80% of the value of their home. A lot of them got a “free” home equity line of credit to boot as the lenders were giving those out like it was Halloween candy!

Then values were slashed in half in Sonoma County where I live. The median priced home in August 2005 was $619,000 and it dumped all the way down to a median of $305,000 last year. In outlying counties, the drop was as much as 66%.

So anyone who borrowed to 80% of the value of their home and then saw a 50% decline in value, has been foreclosed upon, did a short sale or is hanging in there hoping that values might recover to their former glory.
It was a deal killer for my business because in the pre-debacle days, the biggest quantity of loans in my company came from Past Borrowers, that is past clients. In second place were Referrals from Past Borrowers. That source of business virtually went away from 2005 until only very recently.

Over 50% of the loans written in my office this month are Past Borrowers. That’s way up from 0%. Now that’s a recovery!

And it’s because of Hard Money. Every one of those Past Borrowers has either a foreclosure or a short sale – or both in their recent credit history. Many have a recent bankruptcy. Not even their favorite bank will loan to them. Hard Money will. With a good down payment or equity in the property and an ability to make the monthly payments, I can do that loan.

 

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Forest@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993. 

The Winning House Bid – You Get the Deal

The Winning Bid

 

It looks like the various predictions that 2012 will be the best year in Real Estate since 2006, are coming true.

The statistics bear this out for sure, but a more telling phenomena is the dreaded bidding war.  That is a listing that receives multiple offers.  These happen with frequency in a market with not emough homes and too many eager Buyers.  It also happens on really desirable properties.  Of course this is great for the Seller of that property and the values for that area, but only 1 Buyer will take home the prize.  The losing bidders will have to go find another one.  I have personally seen a Buyer from my office recently compete with 34 other offers on a property.

He had the Winning Bid.

What set his offer apart, as far as we can tell, is the fact that he was purchasing with Hard Money.

The listing agent knew that the Hard Money Pre-Approval for that Buyer meant that the lender was ready to go with this loan.  He knew that the property would not likely be a problem to the lender, as Hard Money will do really ugly properties, and this one was not that bad.  He also knew that it would be fast as the contract offered a close of escrow in 21 days or less.

So the Buyer made the offer using Hard Money with a 21 days or less close of escrow and all contingencies removed in 10 days instead of the default of 17 days. This was an offer the listing agent could really get behind and it was the Winning Bid – out of 34 others!

So if you are feeling beat up after making offer after offer to no avail, get to your local Hard Money Lender, get Pre-Approved and go write a Winning Bid!

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Forest@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993. 

Sure Advice for Real Estate Success

LENDER’S VIEWPOINT
By; Broker Forest Tardibuono

Sure Advice for Real Estate Success

As Rick Laws mentions in his 2nd quarter real estate report, the Bay Area experienced over 30% increase in homes sold compared with last year.  A 30% increase!

The big question is: “How does a Buying Agent get their Buyers to write the offer that gets accepted?”.  The answer is: “ They make the strongest offer.”  But what does this mean?

Below are some very successful points of advice that, when followed as much as possible, will definitely contribute to a successful accepted offer:

  1. Higher initial deposit.
  2. Shorten close date.
  3. Remove as many contingencies where possible. (For example, an investor or flipper who will remodel the home and resell or rent it, might go for removing inspection contingencies.)
  4. Stronger loan; Shorter loan contingency removal date; No loan contingency at all.  (This can be accomplished by getting a hard money loan for example.)

Why should a Realtor or Buyer for that matter consider following the above points of advice to increase the likelihood of getting an accepted offer?  How about for these 4 main reasons to own a home:

  1.  Tax Savings.
  2. Pride of Ownership.
  3. Appreciation.
  4. Accumulation of Wealth.  (For renters, if rents go up in the next 30 years at the same rate they did over the prior 30 years then someone renting today for $1,600 will be paying $4,496 in 30 years.   30 Year Fixed rate mortgages stay the same and one can pay down their home and increase their equity, ie. accumulation of wealth.)

In today’s real estate market, houses are just increasing in value so Buyers are making smart decisions for their future financially.

Hard Money can definitely help make an offer “strong”.  I work with Buyers who have damaged credit including a bankruptcy, foreclosure or short sale in the immediate past.  With a good down payment and an ability to show you can pay for the loan, you can get a loan and be a homeowner today.  So call me!

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of experience in real estate and lending.  His phone number is (707) 523-2099.  Email is Forest@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.  DRE license #01464899. NMLS #360993. 

Home Prices, Sales Jump – Good News!

 

LENDER’S VIEWPOINT

By: The Guy In The White Hat, Broker Forest Tardibuono

“Home prices, sales jump”

This is today’s front-page headline from my local newspaper.  It must really be good news as they usually are such gloom and doom about real estate – in spite of the facts within their own articles.  But I digress.

The current market is hot, hot, hot, where I live in Sonoma County, California.  This article also stated that the market, which is already hot, is expected to strengthen.   Check these statistics for your area.  I’ll bet the numbers are similar.

The main hotness gauge is median price.  Median means half sold for more and half the homes sold for less.  The median price in this County rose in April by 8% over March.  The number of homes sold in April increased by 22% over a year ago.

Sales for the first 4 months of the year are the strongest since the 2005 market, which by many estimates, is when the bubble burst.

Because I am in the know, the most telling statistics are the ones that show sales of the move-up homes.  Those are the sales of homes to what were entry-level buyers selling that home and getting a more expensive one.  Those higher end homes are now seeing multiple offers.  Not only that but upper end homes over $1 million have had their best month “in more than 3 years”.

Finally, 30 year fixed rates were the lowest ever last week.  Lowest ever!  In my Hard Money business, March and April saw the highest numbers ever for Buyers applying for home loans using Hard Money. 

The trend will only continue.  This morning already, I Pre-Approved a Buyer who is short selling a rental property and had 2 of them foreclosed 2 years ago.  He is renting a home right now and has picked out a house in the same neighborhood he used to live in.  His house payment will be just a bit more than his current rent, but with the tax savings by owning instead of renting, his house payment is way lower than his rent!

What are you waiting for?? 

It can’t get better than this.

 

 

Forest Tardibuono- the Guy in the White Hat – is a CA DRE Broker with more than 24 years of

experience in real estate and lending.  His phone number is (707) 523-2099.  Email is

Forest@sunpacmortgage.com.  See newly designed website @ www.sunpacmortgage.com.

DRE license #01000559.  NMLS #289456.

 

Close More Deals by Making Hard Money Loans Easy

LENDER’S VIEWPOINT
By Broker, Forest Tardibuono

The current line-up to accommodate almost any Buyer for any residential property type is as follows:

1.  A 30 year fixed rate lender (FNMA/FHLMC).

2.  An FHA and VA lender.

3.  A credit union for those that just miss getting a 30 year fixed rate loan.

4.  A Hard Money Lender.

Keep in mind that most Hard Money lenders typically will also do more than 4 units, commercial, land loans and construction loans. Hard Money is pretty forgiving on credit.  A person can have recent foreclosures, be in bankruptcy, done a recent short sale, low credit scores, have collections, liens, etc., or a combinations of these.

I recently saw a Wall Street Journal article Explaining the Methods of Hard-Money Lenders (written July 21, 2011).  It begins with “As banks continue tightening their purse strings…” which is the theme of the article.  The article mentioned the increased use of Hard Money due to the “…tight lending these days…” of institutional lenders. 

It then goes on to explain the fact that these hard money loans are concerned with “asset valuations and loan to value-ratios.”….”There’s no red tape.”…. “Because there is little bureaucracy when compared with big banks, deals can be approved and closed in just a few days.”

The busy Realtor in today’s market (and well into the future) has to know about Hard Money.  The fact is there are the 30 year fixed rate type lenders out there, call them “A” paper lenders, and then there is Hard Money which is now the catch-all for everything else as there are no “B”, “C”, “D” or “sub-prime” lenders in today’s market.  So be well versed in Hard Money and make it easy Buyers to get into contract.

True, Hard Money loans average 12% interest but for many buyers Hard Money is the only option.  And it is well worth it to get into that new home.  Down the line one can refinance once qualified for one of the other loan programs covered above – but one won’t miss out right now!  Don’t fret about rate objections, just acknowledge and get the contract signed. 

Hard Money is here to stay and is a vital tool for the busy realtor.  2/3 of the loans I do are for purchases. The Buyers are so grateful too, as they thought they had no chance for home ownership. 

Why not give me a call at 707-523-2099 and I will get you/your Buyer fully set up for a Hard Money loan and you can go ahead and get the house deal closed!

 

Forest Tardibuono is a CA DRE Broker with over 24 years experience in real estate and lending.  His number is (707) 523-2099.  See newly designed website @ www.sunpacmortgage.com. DRE license #01000559.  NMLS #289456.

Pride of Ownership: Help Your Buyers Get Their Pride


Pride of Ownership:
Help Your Buyers Get Their Pride

LENDER’S VIEWPOINT
By Broker, Forest Tardibuono

From Webster’s Collegiate Dictionary…pride noun, b: a reasonable or justifiable self-respect.

That is why a person has almost a compulsion about buying a home. That “justifiable self-respect”. That “I did it” feeling when you get handed your very first set of keys to your home. It’s not like renting your first apartment. That’s a pretty good feeling but it’s not Pride of Ownership.

The funny thing is you don’t really know that that is what is compelling you. It’s almost innate that you are drawn to owning your own home. Now you might also be drawn to getting out of your parents house as a young adult but that may be more hormonal than innate. That would be more a Doctors Viewpoint than a Lenders Viewpoint!

I think it boils down to the security of it from a couple of angles. Back in caveman days I could see the security of having your own cave and guarding that cave. I have seen a rash of man-caves at homes I have been in recently. Same idea. Similarly today you have that security as well as security from the elements. You also have the fact that no one can take it from you as you own it. That security. You can do with it as you see fit. You can decorate it to your tastes, you can paint it any color you desire, you can move walls, change the structure, landscape it any way you want, etc.

Think about this. Picture the last time you felt pride. Nice feeling right? As a homeowner you get that every time you pull into your driveway, or play ball with your child in your yard, or water your lawn, or change a light bulb in your home, or clean out the gutters in your home, or cook in your kitchen, or go to your mailbox, etc., etc., etc.

That’s why you buy a home. That’s why you figure out what it takes you, using all your resources, to get the job done. Despite being turned down for a bank loan there are Hard Money loans available to those who want to take advantage of the current housing market and really want that Pride of Ownership – get yours today!

DRE license #01464899 & NMLS #360993
Forest Tardibuono- The Guy in the White Hat – is a CA DRE Broker with over 24 years of experience in real estate and lending. His phone number is (707) 523-2099. See website @ www.sunpacmortgage.com.

Quick, helpful, holiday tip from me, Forest Tardibuono

 

Thanksgiving Real Estate and Lending TIP for you.

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Click here to watch the video on YouTube

Quick, helpful, holiday tip from me,

Forest Tardibuono

Holidays are upon us and I hope everyone has a happy Thanksgiving!  Here’s a very short video and article that CAN HELP YOU this Holiday season, as an individual Homebuyer or as an Agent with Homebuyers, who aren’t quite getting off the dime…

IS THE MARKET TOO SCARY TO BUY?  (By the way – NO!)

Wow, we are being hit by all sides these days. It is being blared across the air waves that it’s as bad as the 1920s.  Why would anyone buy?

Did you know that A LOT of people made money during that depression.  How?  They did not follow the pack.  This is very hard to do.  The best managers of money (Boone Pickens, Warren Buffet, and Bill Gates – for example) are a different breed of cat.  They seem to operate opposite of the crowd.  They buy when no one else is and they will freely tell you to do the same.  It takes a brave soul to not follow the crowd.

There are statistics that show things are not as bad as they seem.  In Sonoma County home sales are up – way up.  First time buyers can finally afford to buy and they are.  There are multiple offers on many homes.  Homebuyer loans are getting approved and people are moving into these homes.  There are not as many homes on the market as there were at the peak in November 2008, which will serve to drive the prices up.  Consequentially rent is going up all around – sometimes more than you would pay for your monthly home mortgage!

The moral of the story is – Buy Now!  If you have the required down payment (as low as 3.5%) and can afford the monthly payment (average $1,420 monthly) – do not wait.

Look to the statistics of what is occurring in THIS market (Sonoma County, Marin County, etc…).  The statistics show a brisk market that is competitive and will only go up from here – so…. It’s times to buy!)

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Forest Tardibuono is a CA DRE Broker with over 23 years experience in real estate and lending. He offers Hard money loans for those with bad credit, difficult-to-prove income, etc.  His number is (707) 523-2099. 

See website @ www.sunpacmortgage.com. DRE license #0146899 and NMLS #360993.

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