Advantage Lending Corp BLOG

Michigan is the fifth worst state in the country for mortgage fraud and foreclosure and with 3,000 mortgage brokers in the state, the Office of Financial and Insurance Regulation is cracking down.  Recently Advantage Lending Corp underwent a random and extensive audit / investigation by thestate examiner.  This audit was performed over a two day period and by the end of the audit, Advantage Lending Corp received a clean bill of health.  Stan the investigator for the state was well pleased with all the compliance and privacy procedures implemented to protect and inform it’s clients with in Michigan Law. 

With the foreclosures on the rise, more banks, lenders, credit unions and private money lenders have tightened their guidelines for lending to a borrower with a foreclosure in their past.  It use to be that Fannie Mae and Freddie Mac would allow a borrower to apply for a mortgage meirly two years after a foreclosure has completed.  However due to recent guideline tightening it is now been changed to five years after the foreclosure has completed.  Obviously this has made it more difficult for someone with a troubled past to get another home.  A common solution to this is a straw buyer.  A straw buyer is some one, usually a relative, who has a good credit history that purchases a home for the real buyer and gets payments made to them from the true buyer.  The primary disadvantages to this plan is that the home is purchased as an investment property which has higher interest rates and larger down payments.  With guidelines tightening up so much this is one of the few options available for some one with a foreclosure in their past. 

Recently I received a phone call from one of my real estate partners asking me if I still had conventional financing available even in a declining market.  Basically he was asking if one of his buyers was going to be able to buy a house with only 5% down.  While so many banks and lenders currently require 10% down to get a conventional loan due to the majority of Michigan being in a declining market, I was able to inform my realtor partner that, yes I can still get conventional financing with only 5% down.  This basically saved a commissionable deal for him, got his buyer into the house, and the buyer was able to buy his house when other lenders had told him he couldn’t with out a full 10% down.  Besides having conventional financing with only 5% down and great rates, we also have 100% financing available with unbelievable rates and no private mortgage insurance (PMI).