Category Archives: Financing Options

Okay, so your tax dollars have gone to help out financial institutions who made bad loans an art.  So how are they using federal funds to loosen the credit market and make housing easier to obtain?

Wachovia’s Stupid Stip
I had a buyer that wanted to buy a house, bank owned house that is, from Wachovia.  Priced at $219,900 the actual value is probably around $245,000.  My buyers anxious to make an offer came to a sudden stop when I read to them a stip in the corporate addenda that I’d never seen before.  Seems Wachovia has decided that the buyers must put down a 5% earnest money deposit that is totally and completely nonrefundable.  Inspection out?  No.  Financing fall through because you lose your job before closing?  Too bad.  They want the buyers to take an approximately $11,000 gamble to buy the house.  It’s a pretty good bet they could/would close.  But seriously…  That was five weeks ago.  Guess what.  The house is still on the market.

HomEq Loan Servicing Corp’s Stupid Stip
Yesterday I inquired about a short sale home that is in the redemption period in Kansas.  Needs about $45,000 worth of repairs but perfect for these young, energetic first time home buyers.  After they buy the house and make the repairs they’ll be up some serious equity.  But wait.  Before HomEq will even look at an offer they require a certified appraisal paid for by the buyers!  Oh, and there are no guarantees they will negotiate with you, meet your offer or even accept the certified appraisal! 

Countrywide Home Loans’ Stupid Actions
I have had a short sale seller for the past few months.  Countrywide sent me a letter stating what they would take.  I’ve sent them three (that’s 3!) offers within a very reasonable pricing window and all three offers have been completely ignored.  No response.  Repeated phone calls, emails and letters unanswered.  Calls to supervisor?  Hah!  I finally pulled my sign and told the very upset seller I’ve had it and sorry they had to deal with Countrywide because I was done wasting my time. 

Can somebody please tell me why we should save these banks?  Is this how capitalism rewards the slothful and inept?  I thought capitalism was supposed to let these people fail and someone that can operate a business would pick up the pieces for pennies on the dollar and be rewarded.  Jeff Brown, you are being called out here.  You like to tell me there is a greater good.  Where is it?  😉

I found this to be an interesting and somewhat depressing article regarding our current commercial lending environment.  It’s published in the Kansas City Star.

I received this email from a mortgage person I’ve worked with in the past and probably will work with again in the future…

Please note that we are receiving releases about changes in lending guidelines.  Just today Chase decided that all second homes and investment properties have a maximum loan to value on a purchase of 80%.  A very important piece of information for your investment clients.

Audra Chandler
Mortgage Planner, CMPS
FirsTrust Mortgage, Inc.
4501 College Boulevard, Suite 250A
Leawood, KS 66211
913-747-3279 phone

I laugh with sadness at the dishonest mortgage loans advertisements I hear when driving around.  There is one in particular that is surely unscrupulous.  (Think high pitched voice kinda like Ross Perot.)  The other day I had an agent in my office telling me about a couple so excited to buy they were ready to write an offer. 

After three attempts to get a Good Faith Estimate from the loan officer (at the agent’s urging) the agent finally called up and demanded one.  What she got was laughable.  Closing costs three times what they should have been and a loan program completely different than what the buyers thought they were getting.  The agent correctly told them now was not the time to buy until they had a good pre-approval letter from a reputable mortgage person.

Then this morning I hear another version of their “blue sky and roses” commercial and they say that after they help you get the loan they will give you financial counseling!  How about starting that counseling before they give the loan and that advice would be to not take out a loan with closing costs that are ridiculous, at best, or piracy.

Times may be harder than they were.  Don’t make them worse.  Seek competent counsel and a couple of opinoions when making huge financial decisions.  Please.

Financing your real estate investments is getting more and more interesting here in the Kansas City area and throughout much of the country.  Much more interesting.  Wachovia lending just shut down.  IndyMac Bank is gone.  And the bloodletting continues.

The good news?  You can still get financed.  Countrywide Home Loans and Wells Fargo do not appear to be going anywhere.  And I still say the single best source for income propeprty loans is your local bank.  You know, the one that only has 2-10 branches.  Based in your home town.  That sort of thing. 

Because with Fannie Mae and Freddie Mac’s new 4 limit you might occasionally need a loan through portfolio.  (In case you didn’t know, Fannie and Freddie say you can only have 4 real estate properties with outstanding mortgages now.  This is down from 10.  A significant difference that really hurts the part-time real estate investor…the bulk of my clients.) 

Investment property loans are still available.  But you’ll need 10% down as a minimum in today’s environment for single family homes and duplexes.  Fourplexes and above will require a minimum of 20% down and maybe as much as 25%.  If you know of a lender with loan product for fourplexes still available at 10%, let me know.

As a professional real estate agent working with real estate investors each and every day (save Sundays 🙂 ) I keep in touch with and up to date with several quality lenders in and around Kansas City.  Let me know if I can recommend a lender to you today.  And if your pre-qualification letter is greater than 60 days old you’ll  want to get it re-run through.  Trust me.