Skip to main content

There Is A New Way to Qualify for an Investor On Single Family Homes. #realestate #housing #news #oregon

Money Jar BH
In order to achieve lower default rates on single-family rental investor loans, many single-family rental originators have enhanced their underwriting criteria and are now qualifying borrowers for SFR investor loans based on property income rather than personal income, according to research fromMorningstar Credit Ratings.


The traditional way to underwrite single-family, single-property investor loans has been to do them as residential instead of commercial loans. Borrowers typically include information on projected rental income from the property and add a portion of this to their personal income; however, lenders of residential investor loans commonly qualify borrowers for loans based on the borrower’s personal income and credit instead of whether or not the projected rental income from the property can cover the debt service.
One of the main factors that prompted lenders to start focusing on property income when considering approval for a residential investor loan is the lower default rates on properties where the income from the rent more than covers the debt. Research from Morningstar found lower-than-average default rates among investor loans where the property income is greater than 1.2 times the debt service.
5-12 Morningstar“This approach makes sense: borrowers should be less likely to default if a property generates enough rent to cover debt obligations and are more likely to default if the debt service exceeds the rent,”wrote Morningstar Credit Ratings RMBS Managing Directors Brian Grow and Becky Cao. “It is common practice for commercial lenders to look at debt service coverage ratios as a key driver of default, and it seems logical to apply this approach to single-property investor loans.”
Morningstar examined approximately 900,000 nonagency investor property loans originated from 2002 to 2007 in order to determine the how debt service coverage affects default rates (using regional rent estimates from RentRange to individual investor properties in the CoreLogic In. nonagency loan-level data).



Click  link Below To Find Foreclosed Homes In Oregon


Team Thayer www.teamthayer.com
ver debt obligations,” Grow and Cao wrote.
Location: Eugene, OR 97401, USA

Popular posts from this blog

Grass Seed Video

Read more

When Will Bank Foreclosurews ‘Normalize’? Team Thayer #realestate #investor #housing #market #news #oregon

With much of the talk surrounding the housing market centered on “normalization” or returning to its pre-crisis state, one metric which the market is watching is the distressed sales share—the share of REO and short sales that comprise total residential home sales. For February 2016, the distressed sales share declined by 2.9 percentage points over-the-year (and 0.4 percentage points over-the month) down to 11 percent, according to  data released by CoreLogic  on Thursday. At their peak in January 2009, distressed sales accounted for nearly one-third of all residential home sales (32.4 percent) but has been declining steadily since then. By comparison, the pre-crisis share of distressed sales was typically around 2 percent; CoreLogic estimates that if the current rate of year-over-year decline continues, the distressed sales share will reach the “normal” pre-crisis level in slightly more than two years. “Prior to the housing crash, the distressed share of total...
Read more

Bankruptcy Filings Dip Even Lower! Team Thayer #realestate #housing #market #investor #News #oregon

Bankruptcy Filings Dip Lower Nationwide bankruptcy filings were 5 percent lower in October 2016 compared with a year earlier, falling even lower than last month’s reported decrease, according to October 2016 AACER bankruptcy data reported by Epiq Systems. Bankruptcy filings totaled 63,042 in October, which was an increase from September’s total of 64,614, and was approximately 2.4 percent higher than October 2015’s total of 63,042 (an increase of 1,572).  Year-to-date, there have been 656,125 bankruptcy filings nationwide for the past nine months of 2016 (about 65,613 per month), down from 2015’s year-to-date total through the end of October of 700,014 (about 70,001 per month). The average number of filings per day in October 2016 was 3,152 over 20 days, which is an increase from September’s daily average of 3,077 over 21 days. The extra filing day in September compared to October accounts for the slight increase in the number of filings in September; had October feature...
Read more