If I had some of Bill Gates Money

If I were a CEO of a large "cash cow" bank or had some of Bill Gates money there are two loans I would design immediately. The first loan I would bring back is the COFI negative ARM. It was a wonderful loan for the right person. How do I know that? Because I have three of these loans still and just over 100 of my clients have them and still love them. What went wrong? They were used for the wrong client and for the wrong purpose. I would design the loan this way..(this is for the area where I work).

Stated income to 75% LTV $800,000 to $1,500,000. Credit score 720 + for self employed or professional only for purchases and 70% with the same parameters as the above with unlimited cash out. I would require 3 months liquid reserves. This loan is designed for the self employed person who has uneven cash flow and puts a lot of money into the property. Think about it. The person getting a $1,500,000 loan needs to put down $500,000. That is a bunch of money.

Now, for the second loan. I would lend in non declining areas only and here is the loan in today's market. Fixed rate second mortgage up to $100,000 cash out, 15 year term, 80% LTV and a 45% debt ratio. Credit score 720. The rate would be 8.75% and there would be a 3 month prepayment penalty for 3 years. This loan would be full doc.

In my area these are two very much needed loans. Another loan that could earn a lot of money for the banks is a loan to battle the reverse mortgages with hypothecations...that will be another blog

Doug Jones