Will this note need a discount? - Posted by Lee

Real Estate Investing Notes
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Posted by Michael Morrongiello on April 10, 2011 at 24:30:33:

Lee:
Fannie Mae loans are underwritten and documented to VERY strict guidelines. There is FULL Income verification, certain debt to income ratio requirements, appraisal and property condition requirements, flood insurance (if need be) requirements, and then the conforming loan documentation and disclosure requirements itself(TIL
s., GFE’s, RESPA, and so forth)…

These loans are readily and easily securitizeable.

Also banks do not always get 100% or PAR for their loans, even FANNIE MAE grade paper.

A Private Seller Financed Note is NOT a Fannie Mae loan… its is and will always be consider NON CONFORMING PAPER. It also will be discounted.

With STRONG Credit, a STRONG down payment, and a premium charge for the interest rate over prevailing CONFORMING bank rates, a seasoned seller finance non conforming Note can be set up so that the discount is minimized but it still will be discounted.

Michael Morrongiello

2

Will this note need a discount? - Posted by Lee

Posted by Lee on April 07, 2011 at 21:42:09:

If I sell a property for $150,000 and the buyer puts down 20% and has a 720 credit score and I have the note professionally underwritten according to Fannie Mae guidelines will I have to discount the note?

The reason that I ask is that when banks make mortgage loans and they sell them a few months later they don’t take any discount. Why do they get paid 100% of face value?