FB's with sub-500 fico scores
That said, I did run across 2 FB's today. I know you like the stories where I can paint a pretty good picture of their situation, but these borrowers are so F'd, their only hope will be either to sell their properties. I don't think that a hard money would help them that much either.
In the first scenario, a refinance, the borrower had a FICO score in the 470ish range. Since a 500 FICO is the bare minimum that I require to get a loan done, I could not do this loan. But just because I can't do it, doesn't mean it can't be done. The problem you run into, is the rate that will be charged to get the loan done. In this case, the borrower had multiple 60 day lates (among other credit problems...I didn't pry) and a sub-500 credit score. The loan was full doc and the LTV was in the 60/70% range. In cases like this, I try to add value to the broker by pointing them in a direction where they might be able to get it done. I bet you didn't know there was a mortgage company called Sub500 Mortgage. The rates aren't pretty...lowest rate possible is in the high 10's...but they will do some ugly stuff as long as the LTV is in the 60 - 75 range. Maybe things will work out for this borrower...but selling the property, walking with a chunk of cash, and repairing your credit might be the best thing for them in the long turn.
On the second scenario, another refi, the borrower had a FICO barely over 500, but they were going stated, and needed a rather large loan amount. Since the loan amount was higher than our guidelines for credit that bad, and underwriting is REALLY looking hard at stated income deals right now, there is nothing I could do for these borrowers. Even if I could help them, the rate would NOT be pretty, and they would have to state an "unbelievable" amount to be able to afford to refi.
So that is about it for FB's for today. Hopefully things will pick up some after the first of the year.