3/19/2024 – NAR Lawsuit from a Lenders Perspective – 1st draft! LOL! I have received a few calls about my opinion on the NAR lawsuit and the whole situation, and I wanted to share a few things from a Lender’s perspective. First, a buyer getting a VA loan cannot pay commissions, so this is going to piss off those fighting for our country, or VA will have to amend its guidelines! The next thing that popped into my head is you can only get a seller credit for 2% on investment property buyers! We could make that work, but what happens when we get a 2% credit on that buyer and an agent agrees to take a lower commission or the buyer pays some out of pocket and we have a 2% amount covering a portion of the commission, etc.. Then, we have repairs at the close of escrow. We must change purchase prices because we are over the 2% limit! The buyer will then have to come out of pocket for the repairs and whatever they pay in commissions! I could go on and on with issues I see, but here is one more. We have two buyers offering on the same property listed at $950K. Buyer A is offering $1,000,000.00 and putting down 10%, but will pay the agent his commission and not ask for a credit! Buyer B offers $1,025,000.00 and asks the seller to pay 25K in commissions to his agent, but he is putting down 20%! Both have 800 credit scores and W-2 jobs, and both have been pre-approved by me! Which is the better buyer? What happens if the appraisal is short? Should the agent for client B say, “Let’s do 17.5% down and allow his buyer to pay the commission?” Yes, it could be an appraisal issue for the 25K. Well, buyer A could go to a 5% down payment with a short appraisal and pay the difference, and buyer B could do less down, too, and pay PMI or buy out the PMI! Many agents will want a cleaner deal with fewer possible bumps in the road, so writing the offer where your buyer pays the commission or waives the appraisal in a competitive offer situation may be the best way to go. It will take a while to navigate this situation, and the busiest agents will have an advantage as they will see more of what other agents are looking for in an offer! As of today, below is the maximum allowable credit from the seller on specific loan programs: Conventional 3%-10% down – 3% max seller credit Conventional more than 10%-24.99% down – 6% max seller credit Conventional 25% + Down Payment – 9% Max seller credit! FHA – 6% max seller credit Non-Owner Occupied conventional – 2% Max seller credit Non-QM Owner Occupied – 6% max seller credit Non-QM Investment – 3% max seller credit VA – Unlimited towards reasonable and customary closing costs and discount points. 4%Max towards pre-paids, funding fee, gift, and rent credits. Veteran cannot pay Realtor Commissions! So, as a dumb lender, I don’t know that we can’t do a customary seller-pay-all-commissions deal, and that will negate everything above! I could be that dumb, but I gave it my best shot! LOL! The first of two signoffs is below: I am available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. But wait, there’s more! Condo / Townhome – issues we know of now. Properties can be financed with 10% down and are considered NON-WARRANTABLE: American Beauty Condos – The brown ones – Insurance – 50 Mil in coverage for 748 units is not nearly enough! American Beauty Village West: Reserves Bouquet Canyon Village – Insurance – On Fannie’s list! Bridgewater, Emeryville - On Fannie’s list! Brookside Walk – Insurance – Cabrini Villas, Burbank - On Fannie’s list! Canyon Oaks – Insurance On Fannie’s list! Casa Marabella – 13951 Sherman Way, Van Nuys -On Fannie’s list! Cornerstone – Insurance -On Fannie’s list! Encino Oaks – 5460 White Oak Ave – On Fannie’s list! Liberty Canyon HOA – 27409 Country Glen Road, Agoura Hills, CA- On Fannie’s list! Mariposa: Insurance On Fannie’s list! Penn Court HOA – 4201 Pennsylvania Ave La Crescenta On Fannie’s list! Rainbow Sierra Terrace – Underinsured and voting on Insurance in March! Scenic Hills – Insurance – On Fannie’s list! Shadow Ridge – Oak Park – Insurance -On Fannie’s list! Sherman Way Condos – 17900 Sherman Way Reseda – On Fannie’s list! Sierra Glen Condos – Insurance – On Fannie’s list! The District Community Association – 19533 Cardigan Dr, Northridge – On Fannie’s list! The Met at Warner Center, Woodland Hills - On Fannie’s list! Treana – Stevenson Ranch: On Fannie’s list! Valle Di Oro – On Fannie’s list! Walnut Gardens II – 7320 Lennox Ave Van Nuys CA – On Fannie’s list! Warner Center Condos – 5515 Canoga Ave, Woodland Hills, CA – On Fannie’s list! West Creek Condos and Townhomes: Insurance On Fannie’s List! Condo Watch List: This means I am not sure, but I will let you know. I can do it, but I doubt everyone can! American Beauty Gardens: We should know by Thursday (still fighting on this one)! Madisons: I know we can do them, but this one will be bad if it gets in the wrong hands! Please let me know if you hear anything new on condos or townhouses. Interest rates are a little better today, but it has been a rocky week or so before we got a good day! Rocky = bad! 12-day escrows if your buyer is pre-approved - Conventional / FHA / Jumbo / Bridge We do loans in all states, so call me with anything you need. Government Loans (FHA / VA) are in the high 5’s and low 6’s Conventional Loans up to $765,550.00 are in the low to mid 6’s High Balance Loans $765,550.00-$ 1,148,325.00 are in the mid to high 6’s Jumbo loans above $1,148,325 are in 6’s Bank statement loans - They are available with 10% down again! 6’s to 9’s depending on down and credit score. No income qualifier – 40% down with reserves! In the 8’s! 0 down loans are in the high 7’s – 660 credit score min right now, up to $793,000.00. Private Money lenders - Hard Money Loans – 35% down! No Ratio Loans 30% down Debt Service Coverage loans with as little as 25% down Bridge Loans - typically 7.49% with limited fees – and they get you where you need to go! 0 down California Dream for all Equity Share – Registration April 3rd to April 29, 2024 3/2/1 Buydowns 2/1 Buydowns and 1/0 Buydowns are available at great start rates! Interest rates are subject to change without notice! The above are LA County Loan Limits. I am still available all week if you need anything. Let me know if you have any questions or if someone is interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 ext. 2222. My direct line is 661-291-2222. When you text, text (661-714-6258) or email me at Mike@AugustaFinancial.com. Have a great day and an even better tomorrow! Please call me when you have a client who needs to borrow! Mike Meena President | Loan Officer Click to Call or Text: (661) 714-6258 This entry has 0 replies Comments are closed.
