What do you guys think of this?

Pros and cons?

http://www.pledgeloan.com/

Interesting, but anyone who has any assets that would be worth pledging in lieu of a down payment will probably qualify for 100% financing anyway, so why would they need to do this? Credit requirements are so loose right now, even the most deadbeat of sub-prime borrowers can get 100% financing. Most brokers can do 100% financing for people with 560 FICO scores and chewed up gum in their bank account as reserves. Not to mention debt ratios approaching 50% of their income.

IMO, just another foreclosure waiting to happen w/that type of loan. Instead of doing anything possible to get someone into a home, how about educating them in ways to save for a DP, and improving their credit scores, so that they won't have to use some crazy loan program to purchase.

KT, I agree. But it is not our job to say who deserves a loan and who doesn't. If a lender is willing to take a risk on a certain type of borrower, it is not my or anyone elses position to tell them they can't buy a home. Also, people have to learn how to be responsible for their own actions. Lenders price risk into the interest rate with the expectation that some portion of the loans will go bad, have late payments, etc. It is purely a business decision with no emotion involved.

Personally, nearly 100% of my borrowers are A paper. I maybe close three or four sub-prime loans a year. I am still amazed that some people can get financing to buy a house and they can't seem to even pay their cell phone bill on time.

thats crazy. why would anyone take working capital to use as a down payment, rates are still at an all time low. 100% financing down to a 560...geeez a 680 score gets you 100% no ratio, non-owner occ.....and here's a question, maybe im am reading it wrong....100% financing....use stocks, bonds mutual funds...etc...for collateral???? there is no down payment, it's 100% financing. loan is secured with subject. something is fishy. not to mention possible tax issues.


Jim

I looked at the website in a little more detail and I can't think of a single scenario where this would make sense.

Just sounds like some sheister outfit praying on people's ignorance. Seriously, if you have any assets that would be worth pledging to this company, you could qualify for 100% financing without having to pledge anything.

I was thinking illegal aliens with assets could benefit, but even they can get regular mortgages...

One of the loans for one of my clients that I can remember, was 100% financing, split into an 80/20 thing, and with about 10K in seller concessions, a crazy high interest rate, of like 10 or 11%, can't remember the credit score, but it wasn't great, and I think a loan amount of around 120k-ish. And the lender insisted they could re-fi in 6 months to a year, and get like 5% rate. Their payment was going to be somewhere around 65% of their total monthly income, it was nuts.

Is owning a home that big of deal? I guess for some. I personally thought they were getting screwed, and told them so. I also said they should talk to a couple other lenders. The other lenders wouldn't touch 'em w/a 10 foot pole. But if they had gone through with the purchase, all they needed was for one thing to happen, an accident, medical issues, whatever, and that house woulda been gone.

Just cuz a lender is willing to take a risk doesn't make it right. Honestly, look at foreclosure rates in Ohio for the last 2 years. It may not be our responsibility to say who should own a home and who shouldn't, but it sure as heck is up to us to educate and guide our clients to help them make the best decision.

Thats a f/c waiting to happen. some sub-prime lenders have rates which have hit the low 10's for 100% purchases, 560 credit score, no pmi, all charge-offs, collections can be left open. they all have at least 2 year pre-pay penalties.

UNDERSTAND....this person cant get a potato chip on credit...and is buying a HOME....no down...seller paying all closing cost....and there coming to the table with a years worth of h/o ins out of pocket and an appraisal.

f/c rates over the last 5-6 years have been traditionaly high. Even in the rate environment we have now...remember the 700 score, perfect customer payin 9.99...and lovin it.


Jim

This loan is designed for the very wealthy investor and want to keep their funds in a well performing investment. These loans are done by lenders who will portfolio the loan. They will give them a rate of return on that asset and make a loan for them. The net return is the interest rate on the loan less what their rate of return is.