San Diego Housing Bubble News and Analysis

You don't have to put money down,and all they are REQUIRED to do is pay about 1200 in closing costs. I don't believe there is any such thing as a no doc va. They are 100% loan to value and I believe the payment can be 38% of your income.

They might not be able to do the VA loan then. They absolutely must have the no doc loan.

People don't often like to accept VA loans because they have to jump through a few hoops. But that's because they are good loans. The loan amount can't exceed 417k. I don't think many builders are offering VA right now, but it's worth a try to check.

",and all they are REQUIRED to do is pay about 1200 in closing costs"

I meant the seller is required, the buyer can try to negociate a va no down no closing- VA no no.

TTFN

No doc is not the same as stated. Even if he does go stated they will want a 4506 (which alllows them to get a copy of your tax returns). If they guy is active in the military or on any type of fixed income you are wasting your time. If the DTI is tight, but he has reserves, etc., you may have a chance FHA at 97%.

Also, PM me if you need to hang your license somewhere :)

Find your next home online at http://www.jc-properties.net

I am pretty sure that with "no doc's" they are going to have to have reserves and a low ltv to go with an institutional lender. Might work for a refi with a ton of equity but a purchase is going to be tough. There may be an exception. I saw a possibility a few months ago that Wachovia was bringing out a 90/10 stated income verified assets. Didn't follow it.

You will need to have relationships with a few good and very knowledgeable mortgage brokers for your clients that don't have a handle on that. You need to be able to find the broker working the programs that your clients can obtain, if any, so don't rely on just one person. HLS might be a good start for you as he is in your area.

Maybe there is a good down payment assistance program there? This can get someone 100% financing with nothing but a small percentage of seasoned reserves. The down payment assistance can make it as though your client is qualifying for a much smaller loan.

Yes, use Nehemiah with FHA 97%.

Find your next home online at http://www.jc-properties.net

Good suggestions guys, keep them coming. Where are all the wacko, look-the-other-way, no down payment loans when you need 'em. These people have good credit, but may not be able to prove they have enough income to handle the mortgage payment even though they do. The man is no longer in the military. He's older, retired and he and his wife are on a fixed income.

The down payment assistance program I was recommending is more like this.http://www.signonsandiego.com/news/riverside/20080429-1503-homeloans.html

Thanks, Rustico.

Hey, didn't you want to be called a gentleman, or something? ;)

Marion,

VA loans are available, but they are capped at $417K for the guarantee amount. The no money down is kind of a misnomer, because they will have to pay a VA funding fee, which can range from 1.5% to 2.5% depending on if they've used VA loan before, but that can be rolled into the loan. Send them to a guy named Ken Bates at Militaryhomeprograms.com, he specializes in VA loans.

My bigger concern is their need to not show they can handle the payment. To a non-loan guy, this is an enormous red flag and I would question their motives. You can have the best credit in the world, but inability to pay means default, plain and simple.

For what it's worth, today is my last day in the Air Force and last day teaching at USC... :-(

Trojan4life

These people have good credit, but may not be able to prove they have enough income to handle the mortgage payment even though they do. The man is no longer in the military. He's older, retired and he and his wife are on a fixed income.
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Over here, I'm the wacko that DOESN'T look the other way.

You are a mortgage person's nightmare.
These are the situations that a helpful person says I CAN DO THAT LOAN, and 4 weeks later is "hemming and hawing" about why they can't get it done, then everybody gets pissed off.

Loans don't get funded by what people think they can afford. (any more!)
Even with good credit, YOU NEED TO HAVE A JOB.

Lender's don't lend on assets, they lend on income.
Usually VERIFIED income.

In whose opinion do they have enough money to "handle the mortgage payment" yours, theirs or the lender's ??
Do they have any assets ?

A good credit score and $5 will get you some coffee at Starbucks.

IF they can verify their fixed income and can qualify, they can get a loan. They have passive income. It's probably going to need to be FULL DOC.

They may need to PROVE that they have been getting their income for at laest 2 years and that it is "expected" to continue for at least 3 more years.

If any part of their income is tax free, they may get more credit for that income by "grossing it up"
Do you in fact KNOW that they don't qualify full doc ?

And the last question that I like to ask an "agent" who tells me that they can afford the payment, even though they cannot prove it is...
Are YOU willing to be responsible for their "wacko, look-the-other-way, no down payment loan" if they cannot pay the lender OR do you just want the commission that comes from this transaction with no other obligation ????

VA may offer something. A vet deserves the help, (but ONLY if they can REALLY afford it)

There is the ethical dilemma of undeclared taxes. Lot's of people make income and it isn't on the books. They have cash but they don't want Uncle Sam to get his fair cut. Could be this type of scenario. But the way I see it this is where things level out. No show income, no get loan.

Raybyrnes, there's nothing going on under the table. Sorry to disappoint you.

HLS, I don't know that they can't qualify full Doc. They have NO assets and a fixed income. They get SSI and social security.

We will look into the link provided by Rustico and try to go VA, but I would think there has to be some of the No Doc loans still floating around out there.

They CAN afford the house.

HLS, send me your email address where I can contact you.

They CAN afford the house.
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ACCORDING TO WHO Marion ?? YOU ??
Then YOU give them then loan...

NO assets at retirement age,, I'd say that they CAN'T afford to buy a house and would decline to be involved with this loan based on what you say, UNLESS they qualify..

Ever heard of a repair or an unexpected expense or a medical bill or car repair ??

The definition of THEY CAN AFFORD IT is:
They qualify for a loan, (so they POSSIBLY can afford it)!

FNMA will allow total debts up to 60% of gross monthly income.
When people bring home 75% of their gross, I don't see how going to 60% is even prudent.

2 years ago, the loans existed.
It's people thinking like you that contributed to the bubble and the mess.

There are retirement homes in Hemet and Sun City below $200,000 ..perhaps they can qualify to buy there.

Hey, Trojan. I'll contact your guy about the VA loan. There will not be a default.

I'm sorry to hear about you leaving your careers. You've been doing that for most of your life I gather. It will take adjustment. Look at the bright side, now you get to relax and work on your golf game, right? :) Also, what kind of professor are you? Teaching at USC is something to be proud of.

HLS, save the self-righteous lecture. Since you don't know the specifics of the situation here means your statement of how I'm thinking and how it is contributing to the bubble mess is invalid. You don't know how I'm thinking.

If you're hungry and want to eat, you can look into what you can offer in terms of getting the loan approved for them. Posting your email address is up to you.

Marion,
First of all, I am going to eat even if I don't do a single loan, which is why I have the attitude that I do, but thanks for your concern...

and don't get me started....
The "self-righteous lecture" is what people need more of not less of. There would be a whole lot less FB's today if they had heard me, instead of agents and other mortgage people that are talking like you.
I hold MYSELF to a higher standard or I wouldn't be public about who I am and what I do.

Let me get this straight, you aren't even an agent yet and ready to do your first deal with a borrower that may not qualify based on traditional lending standards that have been in place for over 50 years.

There is a REASON that people need to qualify, PROVING that they can afford it.
My statements aren't invalid.

If I don't know the specifics of the situation then the lender isn't going to know the specifics of the situation either and if they don't qualify, then THEY DON'T QUALIFY.

I suppose I could submit an explanation to the lender that states MARION ON PIGGINGTON'S SAYS THAT THEY CAN AFFORD IT.
Maybe that will work...

I'm thinking that these are your parents and some family member is going to help them if they get into trouble.
That's all nice and well but unless family members can get qualified for the loan with them, it's not going to help.

Too many people bought houses because someone else told them that they should/could afford it. Family, agents, mortgage scum etc. You have no idea what I hear day after day, week after week, from people that regret what they bought in the last few years.

I don't deal with that crap. Either you lay your cards on the table and qualify full doc or there's a problem.

Believe what you want, I'm part of the solution, not part of the problem

Obviously you aren't telling the whole story of what you "know" that I don't, but I am responding to what I know.

To qualify they are going to have to state higher income than they really have, and sign a form that permits the lender to check their tax returns if they choose to.
Misstating facts on a loan application is a crime.
I won't even consider doing a stated income loan unless I see proof of affordability.

I probably know better than you the legitimate reasons for a stated income loan rather than a complete liar loan.

I'd be happy to help you if I could, but I'd need to know the little secret that you are hiding about them being able to afford it that can't be proven to a lender.

I'm available anytime, and truly try to help whenever I can sheldon [at] HomeLoanSheldon [dot] com

You can also do a search in the box on the left for
Home Loan Sheldon or the recent Problems With My Loan Broker post