This client needed help FAST because his land contract had a balloon date coming up in just a couple weeks.
The Scenario:
A friend of mine at a local credit union called to see if I could help with a deal that needed urgent help. This client was a builder who ended up in a Chapter 7 bankruptcy 4 years ago because of Covid 19. At that time, he was halfway through building his own home using a private money lender. He did a deed-in-lieu of foreclosure with that private investor who then RE-sold the home back to him on a land contract.
Problem One: His credit wasn’t terrible, but it was a little dodgy, and definitely outside the box for traditional jumbo loans.
Problem Two: The land contract was never recorded.
Problems Three, Four, and more:
The borrower never filed a homestead exemption. He was paying over $20,000 per year in property taxes and his DTI was blown out as a result.
He worked in sales for a major construction company and his commissions were large, but irregular.
He made his land-contract payments in spurts where he’d pay 3 months at a time whenever he received a large commission. I created a spreadsheet for underwriting to show his latest payment being 28 days, so LUCKILY no 30-day late payments.
660 score was ok, but not up to the level often seen in jumbo lending.
He had a few 30-day late payments on his car payment.
A loan amount of $960,000 with a value at $1.2MM put the LTV at 80%, still fairly high for this credit profile.
The REAL problem: We were out of time. The seller was happy to call the balloon note due and foreclose, since he would have 20% equity in a gorgeous home.
The solution:
I called in every every rush request and favor I could manage.
The deal was structured as a 40-yr fixed to get the ratios low enough to qualify.
The deal closed on the VERY LAST POSSIBLE DAY with a specialty NonQM loan. The seller was getting on a plane for Tahiti that same day and would be gone for 30 days; speed and urgency were key.
Why this might matter
My friend at the credit union was relieved she could help this client fix his problem. He was a good, long-term member and she hated having to tell him “No”. Sometimes, it’s a relief to have a guy in your corner who can get the tough ones done.
Work with me
Do you have a deal that you think might be approvable but doesn’t fit in the box at your bank or credit union? Reply to this email or call/text me at 616.298.2743 for a same-day answer.
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