Non-QM Second Lien

Property Location: Newport, CA
Purpose: Cash-out
Loan Program: 12-Month Bank Statement Program
Type of Mortgage: Close-end Second Lien
Appraised Property Value: $3,600,000
First Lien Amount: $1,822,710
Second Lien Amount: $750,000
CLTV: 71.5%
FICO: 737
DTI: 38%
Interest Rate: 9.25%

Hurdle:
The borrower is a self-employed business owner. For the borrower’s primary residence, they would like to keep a first lien mortgage, which carries an interest rate of 3%, but also want to access cash-out funds to expand the business. The borrower does not have W-2 income or regular pay stubs. Therefore, the borrower is not qualified under a traditional second lien program. 

Result:
We qualified the borrower under our non-QM second lien program. We obtained the borrower’s business bank statements for the past twelve months. In addition, we received a letter from the borrower’s CPA to clarify the nature of the business and its expense ratio. We then calculated the DTI ratio by utilizing the business bank statements. We successfully helped the borrower obtain cash-out proceeds of $750K, while keeping the first lien mortgage with a low interest rate.

Non-QM Loan

Property Location: Conroe, TX
Purpose: New Purchase
Loan Program: WVOE Program
Type of Mortgage: 30-Year Fixed-Rate Mortgage
Purchase Price: $620K
Loan Amount: $496K
LTV: 80%
FICO: 750
DTI: 22%
Interest Rate: 7.625%

Hurdle:
In this case, the borrower, who is a U.S citizen, is employed by a company located in Mexico.  This has presented challenges for income verification under standard underwriting guidelines, as conventional documents such as W-2 forms or pay stubs are not available due to the borrower’s international employment status.  In addition, the borrower was recently naturalized, and has filed a tax return for only one year (2024). 

Result:
Through the Written Verification of Employment Program, we can verify the borrower’s income directly with the employer in Mexico.  In addition, we compare the borrower’s income in WVOE against overseas income in their tax return in 2024.  This approach has allowed the underwriting team to cross-check the borrower’s income and gained comfort with the borrower’s incomesource and income level.  During the loan review process, we did not require the borrower to translate any bank statements or paystubs from Spanish to English.

Cash-out Refinance

Property Value: $5.6MM
Utilization: Owner Occupied Primary Residence
FICO: 728
Loan Amount: $3.3MM
Program: P/L Program
DTI Ratio: 28%
Type of Mortgage: 30 year fixed-rate mortgage
Interest Rate: 7.75%

Hurdle:
In this case, the borrower required a loan amount exceeding our standard Non-QM limits. As a permanent resident without a U.S. income source, their qualifying income was derived entirely from businesses owned overseas. We were able to structure a solution that met their unique financing needs.

Result:
The P&L program was used to verify income through a CPA letter from an overseas accountant, detailing 12 months of operating income from the borrower’s businesses. The DTI ratio was calculated based on the income stated in the letter. An exception approval was also secured for a loan amount exceeding the standard $3 million Non-QM limit.

Non-QM

Property Location: Westfield, NJ
Appraisal Value: $915K
Loan Amount: $630K
Purpose: Cash-out
Loan Program: Asset Depletion (Utilization) Program
Assets Utilized: Balance in 401K Account
LTV: 70%
FICO: 800
Interest Rate: 8.875%
APR: 9.122%
Term: 30 Year First Lien
PPP: N/A

Hurdle:
In this case, the borrower had recently lost his job and had no other income source. He was in the process of divorcing and needed access to funds without selling his primary residence. With no additional real estate assets to leverage, a creative financing solution was required to meet his immediate needs.

Result:
We utilized the assets under the borrower’s 401k program to underwrite the loan without the requirement of additional income source. The borrower was able to access cash from a cash-out refinance without having to sell their primary residence.