Simultaneous Close - No credit - Posted by Ed Wachsman

Posted by Ed Wachsman on March 01, 1999 at 18:06:04:

Thanks for the reply.

Unfortunately the couple has NO credit score. What I’m trying to do is use their 20% down couple with an 80% loan so that we don’t have to carry any paper.

Simultaneous Close - No credit - Posted by Ed Wachsman

Posted by Ed Wachsman on February 28, 1999 at 08:30:58:

I am in contract to sell a property for $69,900. The buyers are a young couple who haven’t established credit. Unfortunately, their credit report shows two collections (about $150 each) which have reasonable explanations and have been paid off and an eviction last fall which was due (so I’m told) to a misunderstanding regarding a pet.

The positives are that they will be bring 20% cash to the table (proceeds from a wrongful death suit), have no other debts of consequence, will have a comfortable debt ratio (PITI will be about $720 vs. income of $3400/mo for a debt ratio in the mid-20’s with other minor debt), the husband has been employed in the same field for several years and has been with the same employer about 1 year. The appraisal came back at $70,000 which is a legitimate number - not puffed. House is in good condition.

So far I’ve been able to arrange for a 75% LTV first but would really like to cash out by getting them 80%. Given the above, does anyone know who might buy an 80%, 11% or 12% (or so) first at closing if I create one?


FHA - Posted by Rene Perrin

Posted by Rene Perrin on March 03, 1999 at 08:25:49:


These sound like prime FHA candidates. FHA doesn’t need a credit score and if you can document alternative credit- rent payments, phone bill, light bills, etc., you’re in good shape. If the judgements were for only $150, it is likely that the rest of the rent was paid on time. Have you looked at FHA? 97% is a whole lot better than a non-conforming lender or discounting a note.


Re: Simultaneous Close - No credit - Posted by James

Posted by James on March 01, 1999 at 08:00:47:


You say that the couple has 20% to put down. Why don’t you skip creating a note and trying to sell it for between 70-90% ITV and just go with a non-conforming lender. I work with three lenders that will loan 80% LTV on a C customer, which your couple sounds like they are or maybe a C+/B-. The documentation for these loans are very little due to the credit. The lender is looking at their equity position instead of the credit issue. Just a thought.


Re: Simultaneous Close - No credit - Posted by Leesa T.(CA)

Posted by Leesa T.(CA) on February 28, 1999 at 10:03:28:

It maybe possible to cash out at 80% depending on two

  1. The couple’s credit score
  2. The fact that you may have to carry back a second.

Email me if you need any additional information.

Re: Simultaneous Close - No credit - Posted by Cesar

Posted by Cesar on March 17, 1999 at 21:53:14:


What kind of interest rates are these lenders giving you? I am trying to tie up some deals now with some non-conforming lenders, and they seem to be acting just like FHA types.

They want full docs, desk reviews on all the appraisals, have to show cash to close, etc. and the interest rate is 10.5%

I thought non-conforming lenders were easier because they did not want all this information. FYI, these are 80% loans with appraisals to back their values.

If you know any lenders that don’t give out so much BS, believe me, I would be more than happy to listen!

Thanks for your time.

Re: Simultaneous Close - No credit - Posted by Ed Wachsman

Posted by Ed Wachsman on March 01, 1999 at 18:03:23:

Thanks for the reply.

I have not given up trying to get a non-conforming loan but time is getting short and I want to see if selling a note will be any better than what I’m able to do by taking the more typical route. I did get one nibble at 80% today but the conditional commitment for a fixed rate is at 13.99%. I’ll check tomorrow to see what they’ll do for 2/28. I’d like to find a lower rate if at all possible.