“I think you are right that the caller to Aram probably didn’t have enough in reserves. I forgot to mention in my original post that the caller said he and his wife both have excellent credit, so I am assuming FICOs of at least 700.”
If they have the FICOs and really can handle the money they want, they need to hire someone who knows what they are doing.
This is not what I did, but it is legit ,depending on upon principles :),and could get them the loan. I have seasoned reserves. It is way better than faking tax documents in any case. They could dump available credit card balances into a checking or I believe even CD’s for reserves and let them season, while making good payments and keeping percentages of total available balance low for FICO maintenance. I don’t know exactly where the balance need to be, less than 70% rings a bell. Right now if they want to state 5k income they need to dump 15k and maintain it for 2 months, depending on the lender I guess, the reserve requirements probably vary. If they have been responsible enough to get into a position to do this I don’t think they are going to go out and do something stupid with borrowed money and obviously, at least it seems to me, the lenders are not telling the underwriter to flag it for those reasons.
The lender needs this kind of person to make loans to very badly right now. It is the same principle, that in theory would get someone a 0% credit card but even better for the lender. There is a small premium on rate and the pool of loans looks better based on the FICOs and LTV ratios and the have “GOOD ASSET” for collateral.If all loans were done like that we would not have a “shitty asset crisis” as davelj has correctly taught us to see it as. I guarantee that now when the lenders are sending appraisers out they aren’t ready to exchange any winks when he or she comes back with a finished appraisal. These loans are still possible to get sold on the secondary market to. I think fairly readily but I am not sure,
A good mortgage broker can tell someone how to do that stuff. . Arams probably wouldn’t want to discuss it on the radio even if he knows how to do it, which he probably does because more “principled” types would Jump all over it. That is not a zinger aimed at anyone. I think it was beneficial to this thread that the “principle” challenge came up.
