Question about title seasoning? What lenders want. - Posted by Mike

Posted by Brian M. Powers(MI) on April 12, 2002 at 16:02:51:

is there as date / time / location for the “michigan convention”?


Question about title seasoning? What lenders want. - Posted by Mike

Posted by Mike on April 11, 2002 at 19:05:31:


I have a property that I completed rehabbed. I purchased it 6/21/01. I am in the process of selling it to a buyer with a FICO of 680, but he’s going stated income. He was preapproved at 100%, but now it looks like things are going sour because I’m short 2 months on the “required” 12 months title seasoning that lenders are looking for nowadys.

Anyhow, the lender is going to review the appraisal, so we’ll see what they say, but I fully expect to either lower the LTV on the buyer, or not do the deal at all.

Can somebody explain what underwriters are really looking at with these types of deals these days? I understand that they are cracking down on illegal “flip” deals and they are scrutinizing transactions much more, which is actually good for the biz. But, here I have a totally legit rehab. I’d encourage them to do a field review to check my work. I just don’t understand why a good deal should be cut down because the lender doesn’t understand flips.

Any help is greatly appreciated.

Re: Question about title seasoning - Posted by Brian M. Powers(MI)

Posted by Brian M. Powers(MI) on April 11, 2002 at 21:19:12:

there was actually a very lively debate in the hotel lobby at about 3am one night at the convention. ed garcia basically broke it down like this:
if the buyer is qualified then seasoning won’t be an issue. but it takes more than a nice credit score to be a qualified buyer. good credit and a decent sized down payment… and seasoning won’t be an issue. good credit and not a dime of the buyers own money in the deal and now the lender will scrutinize the deal.
think about it…the buyer is going in 100% leveraged with all the risk on the bank…if the bank has to forclose they had better be sure that the property is worth every dime of the 100% financing that they are placing on the property. so seasoning is an issue as a result.

Re: What lenders want. - Posted by JoeS

Posted by JoeS on April 11, 2002 at 21:18:17:

It"s hard to say what they want. Sometimes they just say NO!, we require 12 months or whatever seasoning. My advice is to find another lender. There are a lot of them out there with less stringent requirements. Besides you are so close to the 12 months it’s not funny. Either ride it out with this one or find another. The ones I use do not require seasoning, but I am in NY.

Well stated, Brian… - Posted by Michigan Andy

Posted by Michigan Andy on April 12, 2002 at 15:19:23:

I recently went through the same thing, as my buyer had to go non-conforming, and the lender flat-out refused because I bought at $13k, and was re-selling at $58k only 7 months later. Actually, that was WAYYYY too long for a rehab (another day, I’ll tell you about it).

Wish I had the stamina to stay up so darned late like you guys did. Again, another classic converstaion missed.