Multiple Mortgages

According to Fannie Mae and Freddie Mac rules, you are maxed at 4 financed properties. If you own a fifth, you will not get financing from a Fannie Mae and Freddie Mac direct seller. That does not mean you cannot get financing for a fifth, or additional property. What it means, is that you have to find a lender that offers portfolio products. Portfolio products are loans that they lend their own money on, and possibly also service. Since the bank is lending their own money, they can be a little more flexible on the guidelines when it comes to the number of maximum properties.

Lenders with portfolio products may offer rates a little higher, and different adjustments and hits to the rate, based on LTV, FICO and terms, just like Fannie and Freddie.

Also, on cash out refis, the owner must have owned the home for at least 6 months.
Please check with you loan officer about the properties with high loan-to-values and secondary financing. There are tighter restrictions on them, and therefore, Freddie and Fannie may not be an option, in those situations.

Another point to keep in mind, it applies to 4 properties, NOT 4 mortgages. If you own 4 properties, 1 primary residence and 3 investments, and each home has 2 mortgages, that will still be considered having 4 financed properties.

Sr. Mortgage Broker
Fairfax, VA Homes

New GFE and HUD-1

As of the first of the year, there are new regulations from RESPA. RESPA has created a new Good Faith Estimate and a new HUD. They were created to try and protect the consumer more. I am in full support of protecting the consumer and educating them. The issue is, these forms are not conforming. Banks are asking for different forms or additional forms, thus making the process more complicated than simple. Also, there is a lot of confusion from the governing agencies, the lending banks and the brokers. The idea behind it, is good, the process is showing to be mediocre. Even though regulatory and government agencies brag about how they are helping the consumer, it actually may end up costing the consumer, because of delays, problems with locking rates in, and even more confusion.

Some of the issues that have come up are; the proper disclosure of yield spread premiun for brokers, the true cost for the borrowers, and the pass-thru fees.

I believe down the road, things could show a benefit, but there needs to be a conforming process, so all parties involved can be on the same page, and receive the same training.

We have gone from a market-place with very little regulation, to a market with over-the-top regulation. I am in favor of the regulation, because I strongly believe it gets rid of the individuals who do not belong in the industry.

MD Sr. Mortgage Broker
Fairfax, VA Homes