New Lender Guidelines During COVID-19

Real Estate

NEW LENDER GUIDELINES

 I am getting calls like crazy from people in a panic about their current lender “shutting down” and their loan not being able to close.  Not because of the borrower BUT because of the lender shutting down their loan programs.  Here is what I am seeing right now as an Example

a.      Wells Fargo, tightening their Credit Score AND down payment requirements to 700+ score at a minimum and 20% down at a minimum on their conventional loans

b.      Chase:  Same as above

c.      Fifth Third just shut down their CP loans

d.      SunTrust also shut down some of their programs

e.      Jumbo Loans being shut down

f.       Construction/Perm loans are being shut down

g.      Vacant land loans are being shut down

2.      We may not want to “mention any names” BUT this is what is actually happening (this information has been very pubic and all over the news)

a.      Right now I am so happy that I can help by “picking up the pieces” from this fall out from the other lenders and helping ease the minds of these borrowers left “stranded at the closing table because of their lender not being able to lend right now”

 

Why LMCU is different:

You likely have heard about the liquidity concerns many Independent Mortgage Bankers (IMBs) and the Industry in total have been facing in the past several weeks.  Correspondent lenders have cut many mortgage programs, particularly any portfolio, government and non-QM lending, (NON-QUALIFIED MORTGAGES for borrowers with unique income qualification circumstances i.e. self-employed/retirees/ artists/musicians/part time workers) which is a big part of their business.  Even large Retail lenders (like Wells Fargo) have stopped most portfolio refinance lending.  The IMBs had expected to be able to sell these loans to Correspondents, but now have to take a 5-10 point hit, if they can be sold at all.  Warehouse lines are being capped or reduced further putting pressure on these companies. I are very fortunate to be with a stable, depository institution like LMCU.  We have plenty of liquidity, including $1.2 Billion in cash!  This allows us to continue to do business relatively normally in these times. 

1.      We are the lender. 

a.      We use “our funds” to close our loans/not borrowed funds/warehouse lines/we control our financial transactions/we are NOT a broker or “middle man” to the transaction

b.      We have STRONG liquidity (cash)

c.      We are well capitalized (LMCU has enough capital (cash) and is able to operate without major financial constraints.

d.      We have taken precautions to lend wisely and have written make sense loans for years, we have been in business for over 85 years with sound lending practices, we are in a strong position during this time

e.      We control the loan from start to finish from application to processing to underwriting to closing to funding, we are your lender from start to finish

f.       We have weekly meetings regarding our strength so all staff are aware of our position

                                                     i.     We are not changing any of our lending guidelines and we are not cancelling any of our loan programs we are still business as usual

1.      We still offer loans down to a 620 credit score

2.      We still offer as low as 3% down payment loan programs

3.      We still offer Jumbo Loans

4.      We still offer construction/perm loans

5.      We still offer lot loans

 

·        Smart Move is an LMCU/Florida Portfolio program for borrowers who meet the profession definitions of “Community Experts” or “Community Heroes”. It offers up to 100% financing, reduced MI coverage, and an $800 LMCU credit toward closing costs

·        30 and 15 Year Fixed Loan Options along with our 5, 7 and 10 YR ARM loan programs.

·        Single Family, Townhomes and Condominiums allowed

·        Primary Residence only

·        740 Minimum Credit Score

·        Seller Credit Allowed up to 3% towards closing costs and pre-paid expenses

·        DOWN PAYMENT OPTIONS

o   1% DOWNPAYMENT REQURIMENT FOR COMMUNITY HEROES

§  At least one borrower must be currently employed full-time or part-time in one of the following eligible professions or any employee of one of the following organizations:

·        PUBLIC OR PRIVATE EDUCATION INSTITUTION

·        FIRE DEPARTMENT

·        FEDERAL, STATE OR LOCAL GOVERNMENT LAW ENFORCEMENT AGENCY

·        NURSES (ALL DESIGNATIONS, INCLUDING CERTIFIED NURSING ASSISTANT (CAN)

·        EMERGENCY MEDICAL TECHNICIANS (EMT) OR PARAMEDICS

·        ACTIVE OR FORMER MILITARY PERSONNEL

o   CURRENT INCOME DERIVED FROM ACTIVE DUTY OR MILITARY RETIREMENT

o   MILITARY SERVICE WITH DD FORM 214

o   ELIGIBLE FOR A VA MORTGAGE WITH A CURRENT VA CERTIFICATE OF ELIGIBILITY

 

o   0% DOWNPAYMENT REQUIREMENT FOR COMMUNITY EXPERTS PROFESSIONS

§  CERTIFIED PUBLIC ACCOUNTANT (CPA)

§  CHARTED FINANCIAL ANALYST (CFA)

§  PH.D (Does not include Medical Doctors)

§  ARCHITECT

§  CERTIFIED MORTGAGE BANKER (CMB)

§  ACTUARIES WITH THE FOLLOWING DESIGNATIONS

·        Associate of the Casualty Actuarial Society (ACAS)

·        Fellow of the Casualty Actuarial Society (FCAS)

·        Associate of the Society of Actuaries (ASA)

·        Fellow of the Society of Actuaries (FSA)

·        Member of the American Academy of Actuaries (MAAA)

·        Member, Society of Pension Actuaries (MSPA)

·        Fellow, Society of Pension Actuaries (FSPA)

 

 See below for more details: