Seasoning
I bought a house for $25,000 six months ago and I am trying to sell it, I cant find a lender that will sell it, saying that it is flipping, we are selling for 50,000 put in the contract that we ar selling for 65,000 cause she needs a second mortgage from us. How can we get this done
You need to use a professional broker who knows what lenders to submit to that dont have the seasoning requirements. I know that Greenpoint, Charter One, Flagstar dont have such strict requirements. You may also want to sign an affadavit and present it with your package stating the extensive rehab work you did...
It really cracks me up when people say there is not such thing as 'seasoning' requirement, I have been dealing with this for over 6 months now! VEry discouraging!
Best Regards,
Jeff Adam
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First why is a lender telling you that they won't sell it? Is this a realtor? The only time this is really an issue is when your buyer is trying to qualify for an FHA loan.
Most conventional lenders do not care. They will get a 24 mos chain of title and if they think the value is inflated they will get a field review appraisal or sometimes request a statement of work performed and receipts but you'll get it worked out.
Some questions for you:
1. what does the house appraise at?
2. did you do any repairs on it to bring its value up?
3. How did you acquire the property, in some sort of distress situation?
4. Why are you trying to sell for $65k, and why does the buyer NEED a second mortgage from you? It is like saying she needs to pay more money than she needs to.
Get back to us to see if we can help. Best, Dave
There are rules that say you cannot sell your property for whatever price you like? Forgive me being niave, I'm new, but is this true?
Conventional lenders do not have seasoning restrictions. It is the sub-prime, or B/C lenders that have restrictions.
I find out from the buyers broker if the buyers are going conventional or B/C. I am blunt and tell them that they can not buy my house and I will not sign a contract if they do not go conventional.
Brenda
EMG, you can sell your property for whatever you like, but if you expect a lender to get on the hook and loan money based on one penny over the appraised value of the property, you might be sitting around for a while.
But if you find a cash buyer wanting to pay you $15k over appraised value, and they are fine with that, all the power to you.
Brenda, if I am not mistaken, you are in a market that is full of buyers, so you can afford to adopt that strategy, but for people in slower markets, you can get around seasoning by using temporary owner financing to sell at FULL price, and sell the 1st lien at closing to a note buyer at slight discount, which is a great way to go. Best, Dave
davehays, it has nothing to do with the market. Conventional lenders and VA have no seasoning restrictions. Sub-prime lenders usually do have seasoning restrictions. So knowing that, you must pick your buyer based on their financing. I tell them right up front, prior to signing a contract, that they can not use a sub-prime lender. What does this have to do with the market???
Brenda
there are many subprime lenders with out seasoning requirements..see my profile for e-mail and i will get you a list full of them. also, the above mentioned finding a good broker, i would add to that by locating multiple brokers nationwide that lend in your state. i always go the extra mile to sell my homes by offering to find a broker or loan product for them in their scenario. have had referals for this as well.......good luck
regards-pat
Welcome mal,
I was in Cahokia awhile ago, my inlaws live in Belleville.
I suggest takingrehab property for a short period "subject to" making your repairs and then selling it to avoid some of the hassle. Jeff told me he never mentions the term "subject to" and just tells the seller he will agree to refinance within a certain period of time i.e. 180 days in which time he usually has the property sold..
I think this is a nice touch..
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Brenda:
A lot of conventional lenders now are adopting the same 'seasoning' requirements that FHA has. I have two deals right now that I have been trying to get refinanced and have been having a hard time due to no seasoning. This is with a FICO score of 740+.
What lenders are you using?
Most conventional lenders nowadays due have seasoning requirements. I have a deal I am working on right now that the conventional lender put us thru the wringer and then agreed to do a loan but at a lower price based on the appraisal review. Even though I have comps to support my sales price....
Best Regards,
Jeff Adam
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Brenda:
A lot of conventional lenders now are adopting the same 'seasoning' requirements that FHA has. I have two deals right now that I have been trying to get refinanced and have been having a hard time due to no seasoning. This is with a FICO score of 740+.
What lenders are you using?
Most conventional lenders nowadays due have seasoning requirements. I have a deal I am working on right now that the conventional lender put us thru the wringer and then agreed to do a loan but at a lower price based on the appraisal review. Even though I have comps to support my sales price....
Best Regards,
Jeff Adam
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Refinance and a new mortgage are two different things.
Refi on an investor property is difficult if you have owned the home less than 1 year. Those that will refi will usually only loan you a percentage of the value. Washington Mutual will refi the day after closing on an investor loan at 70% or 75%.
If there were seasoning requirements, that would mean that they have specific programs and guidelines. That is very different from "having a hard time". Having a hard time means that you still got it done, even if it was not ideal.
I also had a review appraisal and had to drop my price to sell the house. The underwriter had question mainly because my partner in the property was the listing agent and the buyer's agent, and was the mortgage broker. Learned a lesson on that one. I have sold more than 5 houses these year that I have owned less than 90 days. The only lender that I can remember is SunTrust and Chase.
The lender never cares about your comps, seasoning or no seasoning.
Brenda, what I meant is that because your market is a seller's market primarily, you have MANY more buyers than in other markets, and as such, you are going to be able to more easily find MORE HIGH CREDIT buyers than in other markets, that is what I meant, so it does have something to do with it.
Depending on the subdivision the property is in, and the types of properties you invest in, you are going to draw interest from different sub-spectrums of the buyer pool, that ranges from poor credit buyers to high credit.
There is no way that every single investor can adopt your strategy and say "if you do not go conventional, I will not sell to you" because if they had rehabbed a house, and the buyers were all coming in with 500s and low 600s for FICO scores, they could afford to just sit on their property.
Plus, as Jeffrey said, more conventional lenders are jumping on this bandwagon, and my point is, is that when that occurs, temporary owner financing is a great tool to avoid title seasoning b.s. that banks are throwing up more and more at investors, that's all.
Thanks, Dave
Dave, if you have a property for sale that you have only owned for one month, you are forced to determine their financing. Would you rather find out now that their lender has seasoning requirements, or would you rather find out ten days before closing when it goes to the underwriter??
Brenda
If I were using temporary owner financing as an exit strategy which many investors and rehabbers do use in this country, I woudn't care because I would be controlling the exit, not another bank, so it wouldn't matter.
It is just an alternative to the way you are doing things. It is starting to feel like you want to argue with me, and I don't see the point, but I appreciate that you have a very professional approach that works for you, and that is what matters. I am just trying to offer alternative solutions and angles to others.
Best, Dave
Quote:
On 2004-09-01 15:01, bgrossnickle wrote:
Conventional lenders do not have seasoning restrictions. It is the sub-prime, or B/C lenders that have restrictions.
Brenda
That is a blanket statement and is wrong. Lots of Conventional lenders have seasoning restrictions.
Some sub-prime lenders don't.
I bought a house on 01/28/2004 for $11,500.00 and I am looking at the HUD as I am typing. I transferred the property into a trust in 02/2004. Fixed it up and listed it 05/28/2004, had it under contract on June 2nd for $67,900.00 The appraisal came in at $65,500.00 and this was a FHA loan. So it can be done, It was supposed to close 07/29/2004, but between my vacations and traveling for work I could not close until 09/03/2004. But it is closing!!!!!! In order to get this done a strong loan officer had to be found and a strong bank. Fortunately the buyer used National City which has offices in several states.
If the buyer does not have a lender and you are trying to find one, go to a REI meeting the best loan officers are usually found there. I get 97% of my business from the meetings or their REAs. Well good luck!!!!!!!!
I personally didnot want to be involved due to a conflict of interest and the amount of money I am making on the house.
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Brenda/Tinman:
You are both absolutely right. It is all about knowing who to submit to. I recently received a list from Lori aka Tinman on what lenders to submit my deals to which made life a lot easier. Maybe we could get a list together that could be posted on this site of lenders to submit our deals to that we are 'flipping' to avoid the seasoning requirements...
Thanks for the information Brenda on those two lenders, I will pass it on to my Broker.
Best Regards,
Jeff Adam
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