December 13, 2022

I had a client come to me last week from an agent, and the client had a new job which is usually fine under the guidelines. This client was a little interesting, and I don’t want to call anyone a fraud, but here is what we got. Let’s say the buyer worked for Ralphs making $55K a year, and his spouse was self-employed and showed little to no income, and her credit was a mess. Hubby got a new job at a grocery/liquor store as a “manager” with a starting salary of $114,000.00, and they needed, yes, you guessed it $112,000.00 in income to qualify! No pay stubs. Just an offer letter! So, I got curious and started looking up the business owner and found that he owned a few liquor/grocery stores. I called one store, spoke with the manager, and asked if they were hiring at any of their stores. He told me that he and the owner run all three stores, and they bounce around and have cashiers. He said he is looking for a couple of part-time cashiers who pay $18 – $22 per hour. I clarified which stores I could work in, and he confirmed the locations.

Hmm, so at this point, I am having fun. The offer letter was a fraud, and the case was closed. I told him that another lender would find this out only after he paid for a home inspection and an appraisal. The scary part is he didn’t seem to care and didn’t even wonder if he could get in trouble. Someone will give him a pre-approval letter, and any decent Underwriter will do what I did and figure this out!

This file had a bunch of red flags, and a good Loan Officer should see the issues! Massive increases in pay, job changes, and career changes with higher income are always things we look at cautiously!

Another reason why you want an experienced Loan Officer! If you have a bad one, then you will have issues down the road.

CPI came out today and crushed the street! The number came in at .1% vs. forecasts of .3%, pushing rates slightly lower today. Inflation is up 1% over the past five months, which is 2.4% annualized. We are now at 7.1% over the past 12 months, and that number will continue to fall as the rate increases continue to slow down the economy. Things move fast today, and if your clients are on the fence, you may want to pull them off because the spring buying season looks like it’s going to be wild if interest rates continue to drop!

• 30-year Government Loans (FHA / VA) is in the mid 5’s.
• Conventional Loans up to $726,200.00 - in the mid to high 5’s.
• High Balance Loans $726,201.00-$ 1,089,300.00 are in the high 5’s and low to mid 6’s
• Jumbo loans above $1,089,300 are in the mid 6’s
• 5/1, 7/1, 10/1 Arms are in the 5’s
• Bank statement loans - They are available with 10% down again! 7’s + depending on down and credit score.
• Stated income loans – I have one bank with 30% down, but everything else has to be perfect! Interest rates are in the 8’s.
• 0 down loans are in the high 7’s to low 8’s- 620 credit score min right now! Mid 6’s, for the most part, up to $725,000.00.
• 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 - are typically 7.49% with limited fees – But they get you where you need to go!

Interest rates are subject to change without notice! Above are LA County Loan Limits.

I will be around all week if you have any questions or if someone interested in buying a property! My cell is 661-714-6258, and my office line is 661-260-2970 xt. 2222. Please text me at 661-714-6258 or email me at Mike@AugustaFinancial.com. Have a great day and a better tomorrow! Please call me when you have a client that needs to borrow!