Recently Funded Transactions
PROBLEM: Our borrower had 5 days left to close on a purchase. He was able to locate a great property and go through a rough 6 month short sale approval process. During this time the he was assured that he qualified for a conventional loan. He did not. He needed help to close quickly. He was turned down because he took heavy deductions on his self employed tax returns; giving a low debt to income ratio.
SOLUTION: We evaluated the appraisal completed by the bank and felt it was acceptable. The borrower was self employed and did not report much money but was able to clearly explain his ability to pay and verify the exit strategy was possible. The decision was made in 24 hours and docs where sent to escrow the following business day. In a total of 6 days we funded this deal at 55% LTV. The borrower was able to come up with 45% down.
PROBLEM: Our borrower owns a single condo in a mix-use property consisting of 2 commercial retail units and 7 apartment units. The property is in a "redevelopment zone" part of town and just completed. The borrower purchased the property pre-built. The mid-fico was 612. The borrower did not pay property axes for some time and had over $168,000 worth of tax liens. The time had to come to pay the tax bill or lose the property. They went to several banks and credit unions to be denied. They had paid for 2 appraisals that had confirmed value but the banks refused to do the loan.
SOLUTION: The borrower called us about the scenario. One of our account executive instructed him that this is a deal we would be able to fund in 7 days. The borrower sent the package in and it made the second credit committee of the day. During committee we where a able to underwrite the file and approve it. The following morning the final decision was made to approve the transaction. We accepted all the appraisals and reports the borrower had. We decided to use a market approach on the borrowers real income and ability to pay, since no correct paperwork or accounting was available. We decided not to focus on the bad credit or the lack of paperwork. The deal made sense so instead of looking at the borrower's past we focused on the equity in this free and clear condo. We decided that a max cash out of 50% Loan to Value would be safe and allow us to have a cushion if he did not pay. .
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Private Money Lender Funding Private Money Loans
PROBLEM: Our borrower found a very attractive car wash property. With 16 days left to close on the last extension of this purchase the borrower was declined from his second bank. He was assured that he qualified for a bankable loan even though he had a low Fico since the property was a solid debt service. He did not. The turn around time to try a new bank was 3 weeks plus new one to be completed.
SOLUTION: After reviewing the loan package thoroughly we felt that an outside BPO otherwise known as a broker price opinion would be adequate and much more reasonable to evaluate the property. We contacted a local 30 plus year agricultural specialist. Within 2 days we had a short report validating the purchase price. The borrower was employed by a farmer/distributor and did not show much income. He was able to clearly explain his ability to pay through a co borrower who had experience in the industry. His plan made sense. The borrower had satisfied all conditions and loan docs went out to escrow. In a total of 7 days we funded this land deal at 55 LTV%.