Can You Spare A Mortgage?

Over at financial forum...

Pstas commented - Poppyloan - 100% LTV up to $2M. 

We Natter, interesting loan program indeed.  I conducted a related experiment last week when I called two large national lending banks to inquire about mortgage loan funds, the results were "shocking".

First call, I have no money or collateral, but I have a job for the last six months in a field I have never worked in before, will you finance me?  Response, 3% DOWN, NO SOURCE, NO COLLATERAL, NO PROBLEM we can qualify you up to whatever your DTI and 3% will carry Sir. No source? Documentation for source of funds on the down is not required Sir.  You can borrow the money Sir. Alrighty then...

Second call, I have $10M in liquid assets with $5M in cash, but I have no job for the last six months and due to legal tax avoidance, I show no income on my 1040's.   I wish to buy a house that costs $500K and will gladly put 20% down, will you finance me? 

I'm sorry Sir without a job or any declared income showing, we could not finance you.  What if I put 50% down, sorry Sir.  What if I put 97% down, sorry Sir.  Wait a minute, your telling me that with cash backing to buy the house 10X over, collateral of another $5M, and all the skin in the game at 97% down, which means no risk on your part, you would not finance 3% because I have no job or show no income? That is correct Sir, we can not finance you with a conventional mortgage through FNMA, FHLMC, FHA, VA or otherwise.  I do know of some lenders who will make collateral loans, but we do not Sir.

Yet at the same time, if I told you I had four cousins and we all wanted to chip in our 20K incomes to make 100K for DTI, with 3% down, NO COLLATERAL, we borrowed the down, only SIX MONTHS of work history in a NEW field, and not A POT TO PISS IN, you would gladly finance us and take a 97% LTV leveraged risk on our purchase of a $500K home???  Up to whatever that combined DTI and down allowed, yes Sir.

And there you have it, banking and lending at its best.  Out.