The Maze of Tough Loan Cases

I recently closed a very difficult transaction that, if any number of lenders had applied common sense, should have been easy to close.

As many of you know if you’ve read my About Mortgage Loans page, I operate under two basic tenets:

1) Mortgage lending makes zero common sense and

2) Banks are in the business of killing loans.

This deal fit into both tenets on all counts.

Well Qualified Refinance Borrower Declined

Here was the situation:

  • Borrower wants to refinance a $2.35 Million loan on a single-family home valued at $3.5 Million.
  • Borrower owns a company that generates millions of dollars in income annually.
  • Borrower owns a commercial property that his company rents from him and that he also rents to additional businesses not owned by him.
  • The commercial property shows large positive cash flow.
  • Borrower has around $700K in liquid asset reserves.
  • Through the refinance we are dropping his rate enough to save him $2500/month on his mortgage payments.

This borrower was declined at least two times by other institutional lenders for this 30-year fixed refinance.

A Thorough Process

The borrower found me by random internet search.

The first thing I do with every deal is to gather all the documentation that a bank underwriter would ask for so I can underwrite the deal myself prior to shopping the loan for the best fit.

It took the borrower three weeks to provide the litany of items I requested. It then took me a week to complete the analysis and find the right lender.

Connections in the Mort