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I'm astounded at this article for several reasons: 1) That it's held up as an indictment of Fannie Mae mortgages. Someone with four leased properties and bein

I'm astounded at this article for several reasons: 1) That it's held up as an indictment of Fannie Mae mortgages. Someone with four leased properties and being savvy enough in the property market to buy and rehab a fifth should know better than to approach a FNMA-backed lender for a 70/30 cash-out refi. Even FHA, previously one of the less-stringent guarantee agencies, only allows four properties under the same ownership. 2) The author is shocked that a program designed for purchase money financing on a buyer's owner-occupied property would turn down an investment landlord. 3) The author makes no mention of approaching any other financial institution or lender. Since, given point 1, he is pretty good at construction but poor at leveraging other people's money (not a slam, that's what _any_ investor wants to do), he wants a bank that writes and services portfolio loans. Which, by the way, means he'd probably be required to want a loan at no more than about 80% LTV across all five properties.

jonknee 13y ago
> Someone with four leased properties and being savvy enough in the property market to buy and rehab a fifth should know better than to approach a FNMA-backed lender for a 70/30 cash-out refi. Even FHA, previously one of the less-stringent guarantee agencies, only allows four properties under the same ownership. You must have missed the third sentence: "I own four properties free and clear." He doesn't have a bunch of loans already (which is risky if the market falls apart, see 2008). He has a bunch of assets.
- pbreit 13y ago
  If he owns them free and clear, why weren't they throwing off tons of income? This whole article didn't seem to pass the "smell test".
  - jonknee 13y ago
    He said income wasn't the problem, the lack of W2 income was. This is the outcome when the decision tree is a strict set of forms and boxes to check. It lessons the likelihood of rogue employees pushing through bad loans, but also increases the likelihood of not making some loans that would be good.
    - rsgalloway 13y ago
      Exactly, it was the automatic Desktop Underwriting process that rejected this, not a human. https://www.youtube.com/watch?v=ThTwl1HrFi4 https://www.youtube.com/watch?v=ThTwl1HrFi4
    - pbreit 13y ago
      He wrote that the loan officer would review his freelance income after 12-18 months. He's clearly at the wrong bank if it won't consider the income coming in on 4 properties owned free and clear. Like I said, the whole article didn't pass my "smell test".

jonknee 13y ago

> Someone with four leased properties and being savvy enough in the property market to buy and rehab a fifth should know better than to approach a FNMA-backed lender for a 70/30 cash-out refi. Even FHA, previously one of the less-stringent guarantee agencies, only allows four properties under the same ownership. You must have missed the third sentence: "I own four properties free and clear." He doesn't have a bunch of loans already (which is risky if the market falls apart, see 2008). He has a bunch of assets.

pbreit 13y ago
If he owns them free and clear, why weren't they throwing off tons of income? This whole article didn't seem to pass the "smell test".
- jonknee 13y ago
  He said income wasn't the problem, the lack of W2 income was. This is the outcome when the decision tree is a strict set of forms and boxes to check. It lessons the likelihood of rogue employees pushing through bad loans, but also increases the likelihood of not making some loans that would be good.
  - rsgalloway 13y ago
    Exactly, it was the automatic Desktop Underwriting process that rejected this, not a human. https://www.youtube.com/watch?v=ThTwl1HrFi4 https://www.youtube.com/watch?v=ThTwl1HrFi4
  - pbreit 13y ago
    He wrote that the loan officer would review his freelance income after 12-18 months. He's clearly at the wrong bank if it won't consider the income coming in on 4 properties owned free and clear. Like I said, the whole article didn't pass my "smell test".