From the wsj.com:
A new mortgage lender is loosening documentation requirements, allowing applicants to provide less paperwork on income and assets than is typical to get a home loan.
Social Finance, a peer-to-peer lender often referred to as SoFi, rolled out mortgage lending in five states—New Jersey, North Carolina, Pennsylvania, Texas and Washington—and the District of Columbia on Tuesday. The San Francisco-based lender began offering mortgages in California in August.
The firm has specialized in student loans since it launched in 2011. The move into mortgages comes as SoFi prepares to file to raise $200 million to $250 million in an initial public offering early next year, according to its chief executive Mike Cagney.
SoFi’s mortgages will be geared toward borrowers with high credit scores, though other criteria will be less onerous than what most other lenders require. The firm isn’t requiring tax returns to verify applicants’ income or proof of funds to verify the source of borrowers’ down payments—requirements that most lenders have had in place since the housing downturn. Instead, SoFi is accepting applicants’ most recent paystub or W2 as proof of income. It will also take all applicants at their word that their down-payment funds aren’t coming from a loan they have taken out elsewhere, says Mr. Cagney. Borrowers will have to make a minimum 10% down payment.
Read the full article here:
http://blogs.wsj.com/totalreturn/2014/10/07/new-mortgage-lender-demands-less-documentation/
More money on the way here:
http://www.housingwire.com/articles/31665-auctioncom-launches-auction-finance-to-spur-investor-activity
We’re not going to change the current Fannie/Freddie guidelines. It will take portfolio lenders blazing their own trail to “loosen up credit”.
As long as we don’t go back to “no doc no down no nothing”
ninja loans I think we will be OK.
I am good with no Doc’s if they have a down payment (20%)
I am good with no down as long as they have doc’s.
0 down maximizes leverage. It always looks pretty good in an appreciating asset class market but it kills you when things go the other way. Basically we’ve stalled in appreciation and in order to keep the appreciation gain going we’re looking at ways to extend leverage (0 down, lower than market rate interest rates, etc.). It will end badly again, even if it helps in the short term.
Seriously don’t count on continued appreciation even if it’s small. We’ve never seen a housing market run up 20-30% in a few years that’s continued on with slow but steady appreciation. It’s much more likely that it’s going to decline, maybe significantly from these levels. Look at any long term San Diego Case-Shiller chart and you’ll see what I mean.
If not then you’re arguing it’s different this time, and we all know how well that argument tends to work. Maybe it is but the odds are stacked against you.
Prices may vary from ‘hood to ‘hood from now on, but we’re not going to see a bubble burst like last time. The mortgage underwriting is so strict that it would take an economic meltdown to force recent buyers out of homes they comfortably afforded and had significant and real down payments.
Interesting that one of their criteria for eligibility for one of their mortgage loans is to be a graduate from a university or graduate program: https://www.sofi.com/eligibility-criteria/#eligibility-mortgage
I could see a small temporary decline but nothing like last time, that was a once in a life time IMO
You can only get that with
“no doc no down no nothing” ninja loans.
That’s when you get Realtor’s buying 10 homes trying to flip them.
IMO anyway.
I have seen Auction financing on Auction.com for some time now. It’s not a new development is it? What is a typical loan scenario? How much down and how’s the rate?
This sounds like bulk rate.