I Can’t Believe How Lenders are Now Treating Well Qualified Buyers..!!!!

Friday, January 16, 2009


I know most of you folks by now have heard in the news how screwed up the “financial markets” are and how it’s “frozen”…haven’t you…?

You also keep hearing about the lousy economy, you know,  the big recession we’re in and you wonder is it ever going to get better…?

Folks,  from my very recent experience in working with  “Bank Owned Properties” and “Investor Financing”, I think I know how to really move things forward a bit.

I think these Financial Institutions have really gone too far, frustrating investors & home buyers by tightening credit which has slowed down the economy.

Check it out….

Here’s a profile of two partners, gentlemen in their early 50’s and succesfull with FICO scores in the 800’s… and a net worth of at least $2 Mil or more each.. They live off of their investments.  Yea I know.. I’m jealous too….!!!

Now I ask you… “How much paper work and verification do you think the “financing institutions” need to qualify these men if they put a Down Payment of 25-30% on a Duplex and a loan for the rest…?”

Here’s more….

  • Each of these duplexes will give them a “Cash on Cash” return of at least 15% the first year.  This return comes after paying all expenses which include; professional property management & landscape maintenance, taxes, insurance and “mortgage payment”, reserves, etc…  Not bad huh….
  • The loan amounts are about $112,500 for one & about $180,000 for the other.
  • Their interest rate on each loan will be 6% when “owner occupied” rates are in the 4.75% – 5.25% range.
  • They will pay higher fees and costs to get the loan.

OK, alright,  they are fine with paying the higher rate & costs because that’s just the way it is and they know lenders want more from investors versus home owners.

So…..?   Would you agree with me that in “ordinary times”, with all these assets and credit history,  the banks would have jumped all over them to get their business…?

If you said yes…?  you’d be wrong…   Oh they qualify alright, but the fact is the banks will no longer accept, just a credit report, a financial statement (FNMA-1003) and  maybe copies of your bank & asset statements.  Oh No….!!!

These loans are all now FULL DOCUMENTATION…!!

John Arvanitis, from Sunrise Vista Mortgage Corporation told me and the investors,  “The days of Low Doc/No Doc Loans are over…!”  Little did I realize.

They had to submit tax returns,  partnership information, partnership returns and k-1’s… and explanations from CPA’S because some income was received from this partnership in a differant “fiscal year” then the “fiscal year” of the partnership.. you know stuff like that.. It seemed endless..and frustrating, but this is the way the market is today.

John went on to say later that “the Bottom Line now is loans will be harder to get”.

Therefore, the lesson here is when you get ready to buy, get all your records together because the banks aren’t in the mood to take risks.

So what do you think…?  Do you agree with me that they might have gone a little too far…?


If you are thinking of investing and you need some financing, please give John Arvanitis a call at 916-729-2000, or his direct line at 916-676-4700.  John knows his stuff and he’s got a staff of loan agents and processors that will process your loans quickly and professionaly.

and… finally if you are thinking of investing in a property in this region, please email me at favinger@rwnetwork.com or call anytime at 916-203-1260.


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