Dodd Frank Act...
 

Really sucks...

You can't get mortgages anymore unless you have W2 income, perfect credit and you plan on living in the house, ie its your only one. Investors are just about screwed.

I have a paid off house that's rented and wanted to take out a mortgage at 50% LTV to free up my cash. Nope. Another investor I know ran into the same problem, he wanted to take out a small loan on a couple houses. He has no W2 income but about $5m in paid off properties, and several hundred thousand in the bank. Nope, doesn't fit the new criteria!

Anyone else running into this with their rentals?

I find it amazing they won't give me a small residential loan but are falling over themselves to give me a much larger commercial portfolio loan.

The mortgage market has gotten to tight, unless you fit into a very specific spreadsheet the won't originate a loan to you because they can't sell it on the secondary market.

I have no idea how an investor would build a SFH rental portfolio unless they had strong W2 income, even than your limited. The old buy for cash, fix up rent, refi out the cash and repeat method doesn't seem to work anymore?

That's what's holding this economy back, just like they say all the time on Shark Tank. Small business's can't get credit, the lending standards are to tight. The banks have a ton of cash they are sitting on and they can't lend it out!

wow, that sucks. Of course ANYTHING penned by those two has to be ****.

Yeah, just hand out mortgages like business cards. Anyone that wants one gets one. Who cares whether or not they are capable of honoring their pledge to pay it back.

Wait a minute..... this is what got us in the mess of 2008.....

It was Dodd and Frank that proposed that everyone has "a right" to a mortgage and then the idiot GW bought in on the stupid idea.

Can't argue with that.

The bank would be reliant on your tenants paying their rent on time so you could pay the bank. If I were a lender that would make me nervous.

Are you banking with Citi, BofA or WF...or the Milford S&L ??

I have a US client, married & living in Ireland who last year wanted to buy a couple of rentals here in addition to the two she now owns. Fuggetaboutit!:(

...As an aside, I can't tell you how pissed off the Accounting World is getting over "Comfort Letter" requests to CPAs for income & employment verification. The profession's pretty annoyed about it. Just another party to sue if the loan goes south.:rolleyes:
AICPA - Concerns Regarding Comfort Letters/Third Party Verification

That's the entire principle behind any business, and I have plenty of ability to cover the note if the house goes vacant, I plan on knocking it down in 12 months anyway.

First County Bank, a nice medium sized bank in Stamford. Never heard or had to do a "comfort letter". This was my first residential note, I'm used to dealing their their commercial side.

I am under the impression that the banks are not loaning because they can make more money in other ways. I have not heard this has anything to do with the dodd frank rule.

Just off the top of my head that sounds like it will keep house prices from becoming overinflated again. As a potential buyer this sounds good to me.

I googled dodd frank and read much of the wiki listing of it. I don't see how it impacts your situation. Do you have a link to an article which explains the linkage between tight lending practices and dodd frank please?

Dodd-Frank ----> Consumer Financial Protection Bureau ---->

http://www.nytimes.com/2014/01/04/your-money/with-the-new-year-new-consumer-protections-on-mortgages.html

Beginning Jan. 10, lenders must take steps to make sure you, as a borrower, can afford to repay the loan you are seeking, based on your income, debts and credit history.

Cant say I'm particularly cut up about that. Homes should be just that. Homes. for the people living in them. If you want to use them as cash machines find another racket.

- Peter.

Exactly.

Wait.. so what do people who cannot afford homes do? Live on the street?