Ramhock Posted August 16, 2007 Author Share Posted August 16, 2007 Can she afford to make her payments for the next 3-4 months? Does she have any cash reserves? 1. Get her into credit repair ASAP. If you need someone to contact, let me know. If you forward me a copy of the credit report, I'll fire it on to my guy. 2. If you can get her over 620, you've got a world more options 3. Talk to her about selling her car and buying something less expensive. House > Car 4. Have her write out a budget - a thorough one, not the slap-happy things we throw together while arguing on the internet. See if she really can afford the place. 5. Give her a small notebook she can fit in her purse. Tell her that, whenever she spends money, to write it down in the booklet. At the end of the day, put it in excel in budget categories. You can't budget if you don't know where your money is going, and most don't. If you have her figure out where her money goes while helping her fix her credit over 60-90 days, when you get the new report back and she knows for a fact that she can afford the home at the options you can give her, then you can help her. Your job is not a one time hit for some people. Your intellectual capital can mean the difference between her selling her dream home and turning into a long time renter, and her being able to keep her home forever. That's good value. That's a loan guy earning every penny of his commission. That's a loan guy who's going to stick around through the next six months and be there in time for the refi boom next year. Good luck. Her D/I = 48/65 Quote Link to comment Share on other sites More sharing options...
Bill Swerski Posted August 16, 2007 Share Posted August 16, 2007 It's even more irresponsible to get the 580 score and take the cash out. Sorry. Oh, I agree. Both parties are to blame here: One for predatory lending practices and one for sheer stupidity. Quote Link to comment Share on other sites More sharing options...
twiley Posted August 16, 2007 Share Posted August 16, 2007 Her D/I = 48/65 What's a normal D/I? 25/75? Quote Link to comment Share on other sites More sharing options...
Azazello1313 Posted August 16, 2007 Share Posted August 16, 2007 i guess i don't see why she absolutely has to lose the home either. what's the house appraise for these days, after her renovations? seems like she could re-fi at 256k....if she tightens her belt in other areas, she could make that payment on $54k/year. the only really huge barrier i see would be if she has significant negative equity and no one will loan her the money. Quote Link to comment Share on other sites More sharing options...
proninja Posted August 16, 2007 Share Posted August 16, 2007 Oh, I agree. Both parties are to blame here: One for predatory lending practices and one for sheer stupidity. I don't think you quite understand what "predatory" means. If she went to him and said "I want to pull this cash out" and he said "this is the only way you can do it" that's not in the least bit predatory. It's certainly not responsible, but it's not in the least bit predatory. Quote Link to comment Share on other sites More sharing options...
proninja Posted August 16, 2007 Share Posted August 16, 2007 Her D/I = 48/65 Loan program/LTV? Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted August 16, 2007 Share Posted August 16, 2007 I bought my first house in 1975. Paid $43K and the interest rates were 9.5%. The rule of thumb back then was no more than 25% of gross for P&I, T&I. Basically 2.5 times your gross was max. We came in at 19%. A few years later the Mrs. has our child, quits working, and now it's close to 25%. Those next 3 years were tough. Got into a little CC trouble (I carried a $1500 balance , made minimum payments), and there was no money for frills. I had a hard time paying for home repairs and upkeep. I'd never rec. anything higher than 25%. JMHO Quote Link to comment Share on other sites More sharing options...
Bill Swerski Posted August 16, 2007 Share Posted August 16, 2007 I don't think you quite understand what "predatory" means. If she went to him and said "I want to pull this cash out" and he said "this is the only way you can do it" that's not in the least bit predatory. It's certainly not responsible, but it's not in the least bit predatory. Perhaps I should've used the word "irresponsible" instead. I disagree that this broker should be absolved from blame, given this person's bad credit, debt, and limited income. Quote Link to comment Share on other sites More sharing options...
proninja Posted August 16, 2007 Share Posted August 16, 2007 i guess i don't see why she absolutely has to lose the home either. what's the house appraise for these days, after her renovations? seems like she could re-fi at 256k....if she tightens her belt in other areas, she could make that payment on $54k/year. the only really huge barrier i see would be if she has significant negative equity and no one will loan her the money. Nobody's going to touch her with a 580 at her current debt service levels. She can't refi into a loan worth having right now, but it's possible she could in 3 months with proper counsel. Quote Link to comment Share on other sites More sharing options...
Ramhock Posted August 16, 2007 Author Share Posted August 16, 2007 Loan program/LTV? mort/home value = 48...total debt/value = 65 FHA, which does not consider FICO, likes to see 33/41. Quote Link to comment Share on other sites More sharing options...
proninja Posted August 16, 2007 Share Posted August 16, 2007 mort/home value = 48...total debt/value = 65 FHA, which does not consider FICO, likes to see 33/41. I got a FHA loan through at a 62% back end ratio and no FICO on a dude that had just moved over from Japan six months ago. Try getting alternative tradelines from people in Japan if you want a tough loan. He refinanced a year later and got that down to 55% or so. He has a family of four, works for Adobe, makes slightly more than our subject but not a lot more. His family has one car, he has no debt, and he lives just fine with what's considered a "high" debt ratio. Quote Link to comment Share on other sites More sharing options...
The Irish Doggy Posted August 16, 2007 Share Posted August 16, 2007 Wow, I need to move up to a better neighborhood! LOL When I got my house, they basically told me I qualified for a mortgage 5X my income at the time. So, I'm not surprised to see this really, but I only went to 3X. Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted August 16, 2007 Share Posted August 16, 2007 How about having a rep who doesn;t know what they are talking about! I needed some clarification from a rep on fannie mae guidelines for calculating tax returns for someone who owns rental properties that cash flow but show a big loss on the taxes...she had no idea and gave me some very very bad information...since I knew it didn't sound right I called fannie mae to speak to an underwriter (which I should have done in the first place)...they set me straight... the question now remains to I call the rep back and tell them how wrong they were? Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted August 16, 2007 Share Posted August 16, 2007 mort/home value = 48...total debt/value = 65 FHA, which does not consider FICO, likes to see 33/41. I do a lot of FHA loans. 95% of them are automated underwriting. The system DOES take into consideration credit scores. If I get a refer, and they have had clean credit for a year and ratios are below 29/41, I have our in house underwriter manually underwrite the file. I have seen FHA automated accepts allowing a back end ratio over 55%. Quote Link to comment Share on other sites More sharing options...
sundaynfl Posted August 16, 2007 Share Posted August 16, 2007 How about having a rep who doesn;t know what they are talking about! I needed some clarification from a rep on fannie mae guidelines for calculating tax returns for someone who owns rental properties that cash flow but show a big loss on the taxes...she had no idea and gave me some very very bad information...since I knew it didn't sound right I called fannie mae to speak to an underwriter (which I should have done in the first place)...they set me straight... the question now remains to I call the rep back and tell them how wrong they were? I would suggest subscribing to Fannie, Freddie and FHA Quick Reference guides... PM me if interested.... Quote Link to comment Share on other sites More sharing options...
chiefjay Posted August 16, 2007 Share Posted August 16, 2007 Don't forget Private Mortgage Insurance, another $100-$150 a month I believe possibly even more at 250k value. I forget the % but it's a nice chunk on your monthly payment until you home is 80% I believe which in this market is hard to get to in a short period of time especially after that refi she did. Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted August 16, 2007 Share Posted August 16, 2007 I do a lot of FHA loans. 95% of them are automated underwriting. The system DOES take into consideration credit scores. If I get a refer, and they have had clean credit for a year and ratios are below 29/41, I have our in house underwriter manually underwrite the file. I have seen FHA automated accepts allowing a back end ratio over 55%. how soon after a Chap. 7 can someone refi with FHA? Our shop does not do FHA.... Quote Link to comment Share on other sites More sharing options...
Ramhock Posted August 16, 2007 Author Share Posted August 16, 2007 how soon after a Chap. 7 can someone refi with FHA? Our shop does not do FHA.... 2 years after discharge, or one with a REALLY good reason. One year after a 13. Obviously, no lates after those! Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted August 16, 2007 Share Posted August 16, 2007 2 years after discharge, or one with a REALLY good reason. One year after a 13. Obviously, no lates after those! Does their current mortgage adjusting count as a really good reason? Quote Link to comment Share on other sites More sharing options...
Ramhock Posted August 16, 2007 Author Share Posted August 16, 2007 Does their current mortgage adjusting count as a really good reason? No, but their 60 year old deacon husband getting hooked on crack, leaving her for another woman and her with all the CC debt, may be. There are many stories in the big city. Quote Link to comment Share on other sites More sharing options...
alexgaddis Posted August 16, 2007 Share Posted August 16, 2007 (edited) No, but their 60 year old deacon husband getting hooked on crack, leaving her for another woman and her with all the CC debt, may be. There are many stories in the big city. hmmm, so what if I said the husband took a year off to travel with Riverdance and the wife was left to pay everything but could not earn an income cause she has no arms and legs... Edited August 16, 2007 by alexgaddis Quote Link to comment Share on other sites More sharing options...
Ramhock Posted August 16, 2007 Author Share Posted August 16, 2007 hmmm, so what if I said the husband took a year off to travel with Riverdance and the wife was left to pay everything but could not earn an income cause she has no arms and legs... Could work. Quote Link to comment Share on other sites More sharing options...
Missoula Griz Posted August 16, 2007 Share Posted August 16, 2007 2 years after discharge, or one with a REALLY good reason. One year after a 13. Obviously, no lates after those! + 1. This applies to VA loans as well. Quote Link to comment Share on other sites More sharing options...
Roadkill Posted August 16, 2007 Share Posted August 16, 2007 Don't forget Private Mortgage Insurance, another $100-$150 a month I believe possibly even more at 250k value. I forget the % but it's a nice chunk on your monthly payment until you home is 80% I believe which in this market is hard to get to in a short period of time especially after that refi she did. Speaking of PMI. If someone purchased a home within the last two years, and put down just the required 20 % to eliminate PMI, then the housing market collapses, and home values drop, can the Mortage Co. come back and demand PMI ? Quote Link to comment Share on other sites More sharing options...
rocknrobn26 Posted August 17, 2007 Share Posted August 17, 2007 But nobody answered my question..............."When did the 25% of gross rule become extinct?" I think it was a great rule. There are too many greedy MoFo's in the market saying "I'm gonna kick ass on this house and make a fortune!" Bull Chit! Some quotes to live by: "The house is under valued, I can't really afford it, but I'll make big bucks if everything falls into place." BULL CHIT! "I can afford it, as long as I don't need to fix anything." BULL CHIT! "It's only 40% of my gross income, but I can eat bag lunches for a year." BULL CHIT! "My income is gonna sky rocket over the next 3-5 years. By then it will be a cake walk." BULL CHIT! W.TF is the matter w/ buying a house JUST to live in? Watch the infomercials. GET RICH QUICK is the theme! BULL CHIT! W.TF is the matter w/ working, living within one's means, bagging some 401's, and retiring when the numbers work?? Yeah this is personal. A good friend of our's son is gonna go bankrupt! He's a believer in the American dream....get rich quick! BULL CHIT! His name is on his Mom's house, he hasn't paid rent on another house the Mom owns in over 2 years. She will be screwed! And that makes me Rant over! Quote Link to comment Share on other sites More sharing options...
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