Sun Pacific Investor Quarterly

A Newsletter for Investors in Trust Deeds

May 2011 Volume 7 Issue 3

Integrity KnowledgeHonesty

Message from the Broker…

Instead of my usual message here, I want to remind all of this upcoming…

HARD MONEY INVESTOR SEMINAR

Attend this informal discussion of current regulations impacting Hard Money Investments. Tuesday – May 10th @ 5:30 pm at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa.

RSVP please to Ari, Forest or Lynn or for your convince you can click RVSP

[youtube=http://www.youtube.com/watch?v=qUulYfnpSjY&w=579&h=325&hd=1]
An introduction into the upcoming Investors Seminar on May 10th, 2011 at your convince

 

**SPECIAL GUEST SPEAKER: Santa Rosa Attorney Max Broome will be there to participate in the discussions and answer your questions from a legal perspective.

A Bit More on Predatory Lending

In no particular order here are some of the more relevant topics that apply to Hard Money Investing.

1. Nationwide Mortgage Licensing System and Registry – NMLS. All Mortgage Loan Originators (MLO) need be qualified through this Registry. They have to pass local and federal tests. There are credit checks, criminal background checks, credit checks and financial qualifications. This is above and beyond the state licensing. There is also substantial quarterly and annual reporting. The Mortgage Loan Originator is given a Unique Identifier Number. There is also one for the company he/she works for. Make sure your Broker has this number.

2. Lender Purchaser Disclosure Statement – LPDS. This describes the trust deed offering from the Mortgage Loan Originator. You need to sign this form for each loan you fund.

3. MLDS/GFE. This form must be provided to the borrower within 72 hours of the MLO receiving the loan application.

4. High Priced Mortgage Loan – HPML. There are 2 tests to see if this loan is an HPML. One is the Fee Test and the other is the Interest Rate Test. Both the feds and the State of California have these 2 ways of determining if the if the loan is an HPML. It does not in any way limit the fees that can be charged or the interest rate on the note. It does require additional disclosures.

5. Ability to Repay. The feds want anyone borrowing money against a residential property with 1 to 4 units, to be able to prove they have the ability to repay the loan and their other obligations. This generally applies to the borrowers principal residence.

I think the above are the main areas that an investor should be familiar with. You can go on line and look up any of those areas to get more insight. I’ll continue these Newsletters.

SUMMARY…

From my review of the regulations currently in effect, there is nothing I have seen that should stop you from making Hard Money loans.

I would suggest that the next time you get approached about doing a loan with a better loan to value or strong borrower or nicer property, that you think about the rate you will require for that loan. Your Broker should be compelled to do that on your behalf as a pattern and practice.

Feel free to call or email me anytime with further questions you may have regarding investing in Deeds of Trust.

I would also like to personally invite you to the Hard Money Investor Seminar. It will expand on these topics mentioned here as well as others that are relevant Hard Money Lending. And if you’re reading this, I’m guessing that’s what you do. Whether you do it a little or a lot, knowledge is power. It certainly applies here because it’s your money!

Best,

Forest Tardibuono

Owner/Broker

NMLS Unique Identifier # 289456

Sun Pacific Mortgage & Real Estate
 800 Mendocino Avenue Suite # 2
Santa Rosa, CA 95401

(707) 523-2099

or email Forest at forest@sunpacmortgage.com

Visit us @ www.sunpacmortgage.com

“LIKE” us @ www.facebook.com/sunpacmortgage

“HARD MONEY” OR “PRIVATE MONEY” LOAN REVISITED

LENDER’S VIEWPOINT

By Forest Tardibuono

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in, a home to rent out, or a commercial building. They include the standard 30 year fixed rate mortgage, the government FHA/VA loans, a commercial property SBA loan, or a Private Money loan.

Private Money is borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a Private Money loan, likely unsecured. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this). The rates and fees are higher than those you’d get from a bank or credit union that does 30 fixed rate mortgages.

Why then would anyone borrow Private Money? There are lots of reasons.

You can get a Private Money loan in spite of a foreclosure, bankruptcy or short sale!

I thought to make the above sentence read like a headline, because it should. No bank or credit union or anyone doing home loans other than Private Money will lend to someone who had a recent bankruptcy, foreclosure or short sale. Further, the property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Private Money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy?

That’s because Private Money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00. If you want a 100% loan, Private Money will not work.

Here is an example of a Private Money Loan. The Buyer had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example. A contractor wanted to buy a dumpy house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to money fix it up and then resell. He got a Private Money loan and was able to fix up the house and pay off the loan within 4 months.

Maybe you need a Private Money Loan!

Forest Tardibuono is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099.

Check out our website @ www.sunpacmortgage.com/

“Like” Us on Facebook @ www.facebook.com/sunpacmortgage

Visit our Real Estate Group @ www.NorthBayPropertyPros.com

“HARD MONEY” OR “PRIVATE MONEY” LOAN REVISITED

LENDER’S VIEWPOINT

By Forest Tardibuono

There are several types of loans you can use to purchase or refinance. This applies whether you are buying a home to live in, a home to rent out, or a commercial building. They include the standard 30 year fixed rate mortgage, the government FHA/VA loans, a commercial property SBA loan, or a Private Money loan.

Private Money is borrowed from private individuals. I bet you’ve borrowed money from a relative. That was a Private Money loan, likely unsecured. It wasn’t from the bank or some other institution. Most private money lenders/investors lend money through a mortgage company (there are laws that require this). The rates and fees are higher than those you’d get from a bank or credit union that does 30 fixed rate mortgages.

Why then would anyone borrow Private Money? There are lots of reasons.

You can get a Private Money loan in spite of a foreclosure, bankruptcy or short sale!

I thought to make the above sentence read like a headline, because it should. No bank or credit union or anyone doing home loans other than Private Money will lend to someone who had a recent bankruptcy, foreclosure or short sale. Further, the property you want to borrow against may not be something a bank will lend on. Banks require a property be in good shape. What if you are looking for speed? Private Money loans are generally much faster than a bank loan. What if your credit isn’t bank worthy?

That’s because Private Money loans are based largely on equity. The most you will get is 70% of the value of the property. If it’s worth $300,000.00 you will be able to get $210,000.00. If you want a 100% loan, Private Money will not work.

Here is an example of a Private Money Loan. The Buyer had almost all of the money to purchase a house. She needed only $75,000.00 more – but didn’t qualify for a bank loan. The purchase price was $231,000.00. She only wanted to borrower 32% of the value. That loan got done within 4 days for a quick close. She beat out other’s that put in offers for the house. She could and did quickly close and her house payment is the payment on $75,000.00.

Another example. A contractor wanted to buy a dumpy house. No bank would lend on it because it was so dilapidated. The contractor had enough for a decent down payment and proved he had enough to money fix it up and then resell. He got a Private Money loan and was able to fix up the house and pay off the loan within 4 months.

Maybe you need a Private Money Loan!

Forest Tardibuono is a CA DRE Broker with over 20 years experience in real estate and lending. His number is (707) 523-2099. See website @ sunpacmortgage.com.

Sun Pacific Investor Quarterly

So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”.  With the dust somewhat settling on the new lending landscape it’s time to inform Investors, Brokers  & Borrowers of some of the regulatory changes impacting Hard Money.  These changes impact each & every one of you. I’ll see YOU on May 10th.

Investors Newsletter volume 7 issue 4

Increase your income doing hard money loans & learn more about investing safely by attending our Hard Money Seminar with local attorney as guest speaker!  5:30pm on TUESDAY, MAY 10th at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa.  RSVP please

Unique Identifier # 289456

forest@sunpacmortgage.com

Sun Pacific Mortgage & Real Estate (707) 523-2099

800 Mendocino Avenue #2, Santa Rosa, CA 95401

www.sunpacmortgage.com

“Like” us at www.facebook.com/sunpacmortgage

Sun Pacific Investor Quarterly Volume 7 Issue 3

A Newsletter for Investors in Trust Deeds

Volume 7 Issue 3

Integrity KnowledgeHonesty April 2011

HARD MONEY INVESTOR SEMINAR

Attend this informal discussion of current regulations impacting Hard Money Investments. Tuesday – May 9th @ 5:30 pm at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa. RSVP please to Ari, Forest or Lynn.

SPECIAL GUEST SPEAKER: Santa Rosa Attorney Max Broome will be there to participate in the discussions and answer your questions from a legal perspective.

Message from the Broker…

So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”. With the dust somewhat settling on the new lending landscape I thought it time to inform Investors of just a few of the regulatory changes impacting Hard Money. These changes impact the Borrower, the Mortgage Broker and the Investor.

PREDATORY LENDING

I have to admit that I’ve been doing these Hard Money loans for years and I thought the Feds had labeled them Predatory Loans. In really digging in to the more recent laws that apply to these loans I made an interesting discovery for myself. These loans are not called Predatory Loans because they are high interest rate and high cost loans. Investors are not predatory lenders because they make private money loans. Predatory Lending is the practice of making a loan to someone that is not in their best interest. Or making a loan to them that does not have a tangible benefit. Or giving them a loan that is not the best loan available for their borrowing profile. Or bait and switch. Or no disclosures to them. Or an onerous prepayment penalty.

The Predatory Lending Laws have as their purpose the eradication of the patterns and practices of lenders that might be deemed predatory.

I personally think it was the federal and of course overblown response to the few bad eggs who were predators with their patterns and practices as mentioned above. Those guys are likely out of business but the remaining mortgage lenders (this means you) are left with the cumbersome compliances that were designed to keep those already chased out of business from harming borrowers further.

AFTER FURTHER REVIEW…

PREDATORY LENDING

The only area I can see for improvement in my own operation is the interest rate we charge borrowers. It is usually 12%, which is not at all

predatory. What may approach predatory per the intent of the feds is that we give that rate to everyone. The practice of giving a borrower who has 50% loan to value the same rate as someone who is at 75% loan to value is borderline in my new view of what the feds are looking for. That gap magnifies when you look at ability to repay, which the feds also now mandate the lender look at.

And I mentioned at my last Seminar the fact that the feds deem the person actually putting out the money as the lender. Not the Broker. So you as the lender should be looking at your patterns and practices.

SUMMARY…

From my review of the regulations currently plaguing us, there is nothing I have seen that should stop you from making Hard Money loans.

I would suggest that the next time you get approached about doing a loan with a better loan to value or strong borrower or nicer property, that you think about the rate you will require for that loan.

Your Broker should be compelled to do that on your behalf as a pattern and practice.

Feel free to call or email me anytime with further questions you may have regarding investing in Deeds of Trust.

Best,

Forest Tardibuono

Owner/Broker

Unique Identifier # 289456

forest@sunpacmortgage.com

Sun Pacific Mortgage & Real Estate (707) 523-2099

800 Mendocino Avenue #2, Santa Rosa, CA 95401

Visit us at: www.sunpacmortgage.com

Like us at: www.facebook.com/sunpacmortgage

Homebuyers Saving Grace!

The Guy In The White Hat Comes To Homebuyers’ Rescue!

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Ever since we opened our doors in Sonoma County in 1988, we’ve given extra care to round up people who have been “Turned Down Elsewhere?” – because of credit, income, the property or a combinations of these.

We are the local Hard Money Lender who can help rescue your deal…and get your Buyer into that Home!

Loan approval is based on just 2 criteria:

1. Good Down Payment

2. Ability to Repay

  • FAST private money purchase financing Sonoma County and contiguous Counties
  • FICO is not a factor
  • Up to 80% loan-to-value – Case by case basis
  • Loan amounts to $400,000
  • Investor and Owner Occupied financing
  • Lower rates with Good Compensating Factors– Case by case basis

SPECIAL NOTE: WE CAN DO A LOAN FOR SOMEONE FRESH OUT OF FORECLOSURE, BANKRUPTCY OR SHORT SALE!

Here are some Hard Money Buyers we have recently rescued…

Flipper – Short Sale Purchase – 80% Loan to Value (LTV) in Santa Rosa. Loan amount $160,000 on a fixer upper. 12% interest only for 12 months.

First Time Home Buyer Purchase – FUNDED IN JUST 10 DAYS! A conventional lender denied this loan. A real estate agent sent it to Sun Pacific. 50% LTV. Loan amount $90,000 at 12% interest only for 61 months. Monthly payment of $900.

Home Purchase – In Contract – Purchase price $149,000 with loan amount of $75,000. Buyer just got a loan modification after being in foreclosure on his home. He is renting out that home and buying a different one for way less money!

CALL FOREST at 523-2099

Or email him at forest@sunpacmortgage.com

See our regularly updated website at: www.sunpacmortgage.com

Special Edition: Sun Pacific Investor Quarterly

 

 

Special Edition

 

Sun Pacific Investor

Quarterly

A Newsletter for Investors in Trust Deeds

Volume 7 Issue 2      Integrity   Knowledge      Honesty      March 2011


 

Change – Change – Change

 

            So much change has been wrought in the lending industry since what has been deemed the “mortgage debacle”.  With the dust somewhat settling on the new lending landscape  I thought it time to inform Investors of just a few of the regulatory changes impacting Hard Money.  These changes impact the Borrower, the Mortgage Broker and the Investor. 

Nationwide Mortgage Licensing System (NMLS)

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (the S.A.F.E. Act) requires the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, the National Credit Union Administration, and the Farm Credit Administration (collectively, the Agencies) to jointly develop and maintain a Federal registration system for those who engage in the business of residential mortgage loan origination. The statute requires these individual mortgage loan originators to be registered with the Nationwide Mortgage Licensing System and Registry (Registry), a database established previously by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators to support the licensing of mortgage loan originators by the States.

A direct result of the mortgage meltdown, NMLS was formed a few years ago to more fully qualify and register loan officers.  It operates independently from, for instance, the Department of Real Estate in California.  The term for a lender who has passed all the qualifications of the NMLS is a Mortgage Loan Originator (MLO). 

 

Some of the qualifications include…

·         Separate state and federal testing

·         Hours of qualifying Education

·         Criminal Background Check

Mortgage Brokers who have passed the above requirements receive a Unique Identifying Number.  Their company too must register with the NMLS and be given a Unique Identifier Number.  

Mortgage Loan Disclosure Statement (MLDS)

 HUD has issued revisions to the Real Estate Settlement Procedures Act (RESPA) (Regulation X) which became effective with loan applications taken on or after January 1, 2010. These important regulatory changes impact the Good Faith Estimate (GFE) and Housing and Urban Development (HUD) Settlement Statements (HUD-1 and HUD-1A) and will place new requirements on loan originators to ensure that borrowers are better positioned to understand their mortgage transaction.

Note that the MLDS and GFE apply to non-owner occupied loans now.  More on this in a future Issue. 

 

            Investors would do well to ask any Mortgage Broker they do a loan with for his or her Unique Identifier Numbers.  Also inquire if they provide the MLDS within 72 hours after taking any loan application.  It’s the law.

          Feel free to call or email me anytime with  further questions you may have regarding investing in Deeds of Trust.

                                    Best,

Forest Tardibuono

Owner/Broker

Unique Identifier # 289456

 
Sun Pacific Mortgage & Real Estate (707) 523-2099

800 Mendocino Avenue #2, Santa Rosa, CA 95401

www.sunpacmortgage.com

or email Forest at forest@sunpacmortgage.com

 

HARD MONEY INVESTOR SEMINAR

Attend this informal discussion of current regulations impacting Hard Money Investments.  Tuesday – March 22 @ 5:30 pm at the offices of Sun Pacific Mortgage – 800 Mendocino Avenue #2, Santa Rosa.  RSVP please to Ari, Forest or Lynn.

Homebuyers’ Rescue!

Guy In The White Hat

Comes To

Homebuyers’ Rescue!

     Ever since we opened our doors in Sonoma County in 1988, we’ve given extra care to round up people who have been “Turned Down Elsewhere?” – because of credit, income, the property or a combinations of these. 

     We are the local Hard Money Lender who can help rescue your deal…and get your Buyer into

                                  That Home!

     Here are some Hard Money Buyers we have recently rescued…

      Flipper – Short Sale Purchase – 80% Loan to Value (LTV) in Santa Rosa.  Loan amount $315,000 on a fixer upper.  12% interest only for 12 months.

      First Time Home Buyer Purchase – FUNDED IN JUST 10 DAYS!  A conventional lender denied this loan.  A real estate agent sent it to Sun Pacific.  50% LTV.  Loan amount $90,000 at 12% interest only for 60 months.  Monthly payment of $900. 

     First-time Homebuyer Purchase – 80% LTV in Santa Rosa, CA.  Loan amount $189,600 for 61 months interest only at 10.5%.  Monthly payment of $1,659.  *DREAM HOME with Million Dollar Views! 

     Home Purchase.  Purchase Price $550,000 in Sebastopol, CA.  Self-employed Buyer.  $325,000 loan amount to buy his DREAM HOME! 

    Loan approval based on just 2 criteria:

1. Good Down Payment

2. Ability to Repay

  • FAST private money purchase financing Sonoma County and contiguous Counties
  • FICO is not a factor
  • Up to 80% loan-to-value – Case by case basis
  • Loan amounts to $400,000
  • Investor and Owner Occupied financing
  • Can get you good lower rates – Case by case basis

PRIVATE MONEY Is that a good loan?

             As a Private Money lender for the last 20 years I have been asked many, many times – “Is that a good loan?”   Initially I would do the analysis of the house payment compared to 30 year fixed rates and the costs divided by the number of years they’d have the loan, blah, blah, blah.  Finally I just told them the simple truth, if it’s the only loan you can get.  That’s a good loan. 

            I’m not being flip here, but when your home loan application has been turned down by the 30 year fixed rate lenders, the credit union, the bank you’ve been at for umpteen years and your family won’t loan you money, the truth is the only program left is private money.  And that requires you have equity and an ability to repay the loan (if it’s your principal residence) or a down payment if the loan is to buy a principal residence.

            As of this date 2011, the lending standards nationwide have become so overly restrictive that to get a loan almost requires an act of Congress.  In actuality that is not far from the truth as the federal government now owns most of Fannie Mae and Freddie Mac.  They are trying to tighten up the standards to help the housing industry but they are actually messing up the works.  They sure will not go to bat for a homeowner who desperately needs a loan but if you can prove you don’t need it they will give you one.  Don’t get me started here!

         Private money loans are based largely on equity but you do need to be able to prove you can make the payment.  The most you will get is 70% of the value of the property.  If it’s worth $300,000 you will be able to get $210,000.  If you want a 100% loan, hard money will not work.

          Here’s a real example of a private money loan:  The borrower had almost all of the money to purchase a house.  She needed only $75,000.00 more – but didn’t qualify for a bank loan.  The purchase price was $231,000 and she only wanted to borrower 32% of the value.  This loan got done within 4 days for a quick close and she beat out other’s who put in offers for the house because she could quickly close.  Her house payment is now the payment on $75,000.

            Another example is a Contractor wanted to buy a dump house.  No bank would lend on it because it was so dilapidated.  The Contractor had enough money for a decent down payment and proved he had enough money to fix it up and resell.  He got a private money loan, was able to fix up the house and sell it within 4 months. 

            Is that a good loan?

Forest Tardibuono is a CA DRE Broker with over 23 years experience in real estate and lending.  His number is (707) 523-2099.  See website @ www.sunpacmortgage.com.

Like us on Facebook.com @ http://www.facebook.com/pages/Sun-Pacific-Mortgage-Real-Estate/178718062160113?v=wall#!/pages/Sun-Pacific-Mortgage-Real-Estate/178718062160113?sk=wall

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