This is Non Owner Only. There using DCSR or No Ratio high rates, you can not do No ATR on Owner Occ per Dood Frank
Would love to see the guidelines, matrix and pricing for these loans but I disagree with a lot of what you are saying. Government backed FHA and VA loans are given out to “subprime” buyers with 0 – 3.5% down everyday. Yes the income is verified but with little to no investment in the home, higher than QM ratios allowed and virtually no reserves required, these are much riskier loan than a 20% Down NINA. 100% NINA and Occupancy fraud brought down the house of cards in the last crash. Stated Income and even NINA loans have a place and there is a valid need for them in the A paper space. I am still doing business with two banks who did A paper, Stated Income loans at 80 LTV or less (and never allowed secondary financing) before the crash. They were criticized before the crash for not being more aggressive because their default rates were too low. Their default rates remained relatively low through the crash and they are still profitably in business today. Stated Income, Negative Amortization, Interest Only Arms in and of themselves are not “Toxic” or bad loans for the right borrowers at the right LTV.
exactly… higher credit scores and lower LTV. Not the 95 and 100 LTV down to 620. If 680 and above and 80% or lower… it makes sense.
I’ve been in the business since 1992 so I’ve seen 125% cltv home equity loans from the ‘90’s and lived through the crash. This is nothing but dangerous for our industry which, by default, would be dangerous for our economy. I think NINA and SIVA are awesome and prudent if offered conservatively. Meaning, 70% max ltv and 700+ credit scores to start. If someone has a 720 fico, they’re going to pay their bills and somehow have the means to do so no matter what. With that being said, we must be verifying their sources of income and then applying common sense. With stated or no income on an application for a 3rd grade teacher, in their second year out of college, that would require $10k/month income to “theoretically” cover their full monthly obligations, it seems ridiculous even with 700 credit scores and 70% ltv. This eliminates the drug dealers you mentioned!
First, This has to be outside Dodd-Frank because non-qm loans still have to meet ATR. So this would only work for NOO properties, business purpose loans.
Second, the 80%LTV would help protect the investor & the borrower from a downturn in home prices since it would have to be a significant decrease in value to end up upside down in their equity.
This seems to be a niche product but don’t see it in qm or non-qm anytime soon.
The Agency NINA program is being offered by “360 Mortgage Group” not “Mortgage 360”. This is the same company that offered the $99/month payment program for veterans and HARP w/no restrictions.
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