Posted by John Merchant on September 05, 2010 at 12:14:23:
TF is not workable on FHA, VA or any other guaranteed loans because on all those a completed HUD1 is required and on HUD1 Borrower is required to state details of his down payment including its source and affidavit that its B’s own money…and TF funds can’t be claimed to be B’s own, etc as such would be prosecutable fraud.
TF is possible only on relative few commercial RE loans and then only where the new 1st lender doesn’t know, care or inquire where the down payment comes from or its details…and with cooperative escrow co that will hold open the “closing” of the purchase long enough to get TF lender repaid from escrow’s trust account when it’s received the LT loan funds.
As you can readily grasp few comm’l loan deals have all these necessary elements and w/o them, not a TF deal.
Google for TF and you’ll find a number of articles defining and describing how TF works.
I could be willing to help client structure a safe and workable TF deal on the right commercial loan.
Also wanted to mention I’ve seen a number of TF deals in another arena…where TF$ lender goes with bidder to the DOT Foreclosure Auction with cash in pocket and if his client wins the bid (on pre-studied property) then TF lender pays the Trustee and holds all until bidder’s LT Loan is done and TF lender is paid back including interest due him. You can understand that here, too, the TF lender is taking no risks as he’s in charge until he’s paid back P&I due him.
We have several of these TF guys in Seattle area and I’d suspect in most of the rest of the country by now.
any lenders that have NO seasoning issue? - Posted by Tim
Posted by Tim on August 23, 2010 at 12:17:03:
Hi there fellow real estate friends. Could any of you please share as to any current lenders that do NOT have a title seasoning requirement as their funding guideline? There is a gentleman whom I’m corresponding with (600+ credit score)that wants to purchase this home (owner occupied), but his lender will not fund this for 90 days due to garbage title seasoning rules. Thank you for sharing any thoughts.
Transactional Funding work? - Posted by John Merchant
Posted by John Merchant on August 28, 2010 at 13:24:27:
I’ve used a “transactional funder” when I needed very short term money for REI purchase, with full commitment from the long-term lender to make the agreed loan at end of 15-120 days “seasoning”.
The TF funds never even leave escrow but they’d show it as your “down payment”…I repeat, the money doesn’t even leave escrow’s trust account so your TF provider, whether pvt or co., is quite safe and secured that their money isn’t going to be at risk.
Although I had pvt lender provide the TF for my deal, now I’m seeing ads from a number of lenders that are set up just for this.
This could not legally be used for OO individual’s new Fed insured home loan as therein, borrower would have to sign and swear to veracity of HUD 1 and state that the down pmt was his own money.
In my deal since my LT money was @ HML rates, and lender didn’t care where my “down pmt” came from (didn’t even ask me in its voluminous paperwork)it was legally workable.
If you don’t find already established TF any pvt lender would probably be usable and willing because of the no-risk feature…and my pvt lender keeps asking me when he can do next TF deal!
Re: any lenders that have NO seasoning issue? - Posted by Natalie-VA
Posted by Natalie-VA on August 24, 2010 at 08:29:42:
Tim - There are LOTS of lenders with no seasoning issues, but I encourage you to work with someone local to you. Your best bet is to start calling the mortgage arms of your local banks. I sell houses in less than 90 days on a routine basis. Your buyer either has qualification issues, or he’s dealing with the wrong lender.
Re: any lenders that have NO seasoning issue? - Posted by Danielle
Posted by Danielle on August 23, 2010 at 21:24:48:
We do not have seasoning issues on our Conventional or FHA product. Borrower must have a 620 credit score and here are the other overlays.
· FHA Flips with 20% increase ok too!!
· HUD $100 REO program now available!
· No 90 day seller seasoning required on Conventional Purchases
· Minimum fico for Conv/FHA is 620
· No 2 YR Landlord History Required on NOO Purchase
· No Max DTI on FHA loans with a DU approval
· No score and/or credit history needed for occupying co-applicants w/ FHA findings
· Under 2 years Self-employed ok (min 6 mo) case-by-case.
If you have any questions you can email me at firstname.lastname@example.org
Re: any lenders that have NO seasoning issue? - Posted by Herbster
Posted by Herbster on August 23, 2010 at 20:58:19:
While no help to you my local credit doesn’t have any, try yours. Actually I’m not quite sure what you’re doing but it sounds like you should have purchased the home under an LLC and then transferred ownership of the LLC for a fee. Herbster
Re: Transactional Funding work? - Posted by Lee
Posted by Lee on September 04, 2010 at 19:46:48:
What do you mean that the private lenders funds never leave escrow. If you are buying a foreclosure from a bank and it requires 120 days seasoning then you are going to be using your private lenders money to payoff the bank. His funds have left escrow.
In this example are you selling the property to a cash buyer that goes ahead and deposits their money into escrow to wait out the 120 day period?
TF for small niche only - Posted by John Merchant
Posted by John Merchant on September 05, 2010 at 12:16:05:
TF is not workable on FHA, VA or any other guaranteed loans because on all those a completed HUD1 is required and on HUD1 Borrower is required to state details of his down payment including its source and affidavit that its B’s own money.
TF is possible only on some commercial RE loans and then only with some few lenders who don’t inquire where the down payment comes from or its details.
I know of only one or two such lenders in WA,OR and ID area.
If you are working with a loan scenario and lender like this and it’d be possible to hold escrow/closing open long enough to use & then repay TF w/o its having left escrow, then yes TF is a possibility therein.
If I were brought in as a consultant in such a case then I might be able to help you use TF to buy some income property or other.