Written By: Glenn Michaels, Op-Ed Writer
More and more licensed mortgage bankers want to originate and close FHA, VA, Fannie Mae and Freddie Mac loans, or as I call them, “plain vanilla” loans or “agency” loans. Unfortunately, not all property types and borrowers can fit in an “agency” loan. In some companies a loan application that does not fit into an “agency” loan is an automatic declination.
There are many institutional investors and portfolio lenders that will allow an approved mortgage banker to originate and sell all kinds of exotic mortgage products. As a company if you search it is amazing as to the exotic mortgage programs out there. No loan officer, and no mortgage lender should lose a mortgage loan application due to not having a particular mortgage product that truly fits a borrower’s need.
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Recently I changed employers and my new employer’s menu of mortgage products reminds me of the Wild West days prior to the “mortgage melt down”. Now if an applicant comes to us for a mortgage and the applicant cannot apply for an agency loan we can still provide the applicant with many alternative mortgage programs.
Most lenders do not offer stated income loans but we offer it only to self – employed applicants as it was originally intended for. Prior to the mortgage melt down there were lenders offering stated income loans to wage earner applicants. These were “liar” loans as a wage earner can provide evidence of their real income. We all know the self – employed borrower cannot always provide their true income so these applicants need a stated income loan.
Condominiums and cooperatives are not always in an approved (warrantable) project. We have the ability to lend to people in a non – warrantable condominium or cooperative project. This again gives us the flexibility to offer mortgage financing to applicants in almost any condominium and cooperative project.
The United States is a land of immigrants and foreign nationals. Traditionally these applicants always have difficulty obtaining mortgage financing. We also have a special program for these applicants.
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Typically a borrower without a social security number/card could not obtain mortgage financing in the United States. However there are institutional investors who will lend to borrowers with no social security number/card.
The list of options for our loan originators and applicants are extensive. The alternative mortgage programs are out there. You and/or your company must do the research to find the alternative mortgage programs.
These alternative loan programs are not priced the same as the agency loans. In fact some of the loan products are expensive. The applicant must remember that he is obtaining alternative mortgage financing and there are added risks to lenders that offer these mortgage products. All mortgage applicants must be ready and willing to pay for the added risk to the lender.
About The Author
Glenn Michaels - As an NAMP® Opinion Editorial Contributor, Glenn Michaels is a mortgage underwriting instructor for CampusUnderwriter (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years.
