Principal Residence Lending
At Storehouse Lending, we will always do Owner Occupied loans.
These are usually great loans and do have the most regulation by the State and Feds,
which is why some brokers have decided to discontinue it from their programs.
Did you know that most of them are just shy of getting 30-year fixed rate loans? Yup, it's true!
So what are some reason they get denied?
Most are denied due to their credit.
Second reason is due to income
Property Issues is the third reason.
Nowadays, a lot of mortgage brokers have decided to not do this type of loan, stating the amount of additional regulations
one has to beware of and comply with when it comes to owner occupied loans is too burdensome. What they are missing is,
they are turning down a lot of investors away from this type of loan, simply because they don’t know or don’t follow the regulations
that are required themselves. And quite frankly, it's not that difficult to know the regulations and comply with them.
Here at Storehouse Lending, we read, study, and comply with them. Simple as that.
Most of the owner-occupied loans that we do require an “exit" strategy. The Feds require that the Borrower on an owner-occupied
loan demonstrates an “ability to repay”. However, we don’t even write the loan if they cannot prove they can repay the loan.
We take it that seriously.
Last but not least, borrowers are to take a mandatory Consumer Credit Counseling class before the loan is recorded.
It's over the phone and usually takes about an hour.
There are really just a few questionable regulations that apply to owner occupied transactions:
- The loans can be rescinded for up to a few years if the correct disclosures were not made at the beginning of the loan.
- These loans have a longer runway to start the foreclose process.
As these loans are required to be serviced, this is a servicing issue.
The regulation requires you wait 120 days to begin the foreclosure process.
After that it is regular foreclosure timing.