Max Bailey from Call the Underwriter shares his knowledge and experience in being a RMLO focused solely on helping note originators and owner-financed sellers ensure that their notes and borrowers are eligible and Dodd-Frank compliant. He shares his process and underwriting strategies and what to look for when considering selling your property with owner-financing.
You can connect with Max at http://CallTheUnderwriter.com.
Listen to the podcast here
Ensuring Your Notes Are Dodd-Frank Compliant With Max Bailey
We are on our next session with this expert guy out here. If you are in the originating space and looking to originate some notes, one of the most required things you’ve got to have these days if you are going to do it more every once in a while is you need to have a Dodd-Frank-compliant loan. You need to have an RMLO. Somebody is going to help walk you through the process of making sure that your loan is Dodd-Frank compliant. It also makes it a truly saleable loan in a lot of cases. After the last Note Camp, one of the biggest questions we had and people requested was, “Can you get somebody on to talk more about creating Dodd-Frank compliant loans or making sure everything works well?”
I’m the first person when we settle on a date. I reached out to Max Bailey here, Call the Underwriter. Max is very well-known in the industry. Call the Underwriter is the only company I refer people to when it comes to, “I need help originating out. Who do I need to talk to?” You’ve got to remember to call Max, Call the Underwriter. Max, we are honored to have you join us from Montana.
You maybe have heard us talking beforehand. He’s in the process of building his dream home and everything like that with him and his wife up there. We are glad to have you here on the show for the first time. Before we dive in with the nuts and bolts of Dodd-Frank and owner finance, how did you get into what you are doing now, maybe your back background in history?
I fell into it like I have everything in life, but I always say I didn’t put much planning into getting born, and that’s how everything else has happened in my life as well. I’m along for the ride. I was a firefighter for 30 years, and I had a lot of time off. Every firefighter does at least 1 or 2 other gigs on the side. I started buying rental properties several years ago, which led me to do a lot of property financing and lot of management. I even ended up writing a book on rental properties and all things rental property.
Along the way, because I didn’t sit well, I got bored, so I went and got three college degrees. Don’t ask me why, but one of them ended up being in Finance. Over the years, that was something I was interested in. When I wasn’t being puked on professionally, then I was crunching numbers, doing rental properties, and buying and selling. When I got ready to retire, I decided I would better do something other than run in or out of burning buildings. I was getting too old for that, so I ended up partnering up with Russ, learning this business, and then I ended up buying him out and taking it over. I sent him on vacation and continued on.
Let’s talk about what your specialty is. Let’s talk about Call the Underwriter. What do you do, and who are the clients you are working with? When do folks need to call you and when they don’t?
For anybody that doesn’t know anything at all about creating a note, the Federal Government has a lot to say about how you create a note and how you loan money. This is particularly important with respect to owner-occupied. When we talk about regulation over note creators, we are primarily talking about Dodd-Frank, which is relevant to owner-occupied dwellings of 1 to 4 units.
Anybody looking to buy and live in a fourplex or smaller that’s going to borrow money, whoever they borrow money from, that lender is subject to the regulation of Dodd-Frank. The eight elements of the Ability to Repay. We talk about ATR a lot. ATR is the Ability to Repay. That’s what runs our life, and then the CFPB, the Consumer Financial Protection Bureau, is the teeth of Dodd-Frank.
We talk about them both interchangeably but for the purposes of understanding the entities, the CFPB would be the enforcement ARM of Dodd-Frank. A quick history, Dodd-Frank was born in 2010, almost directly on the heels of the housing bubble burst of ‘07 and ‘08. What I tell people all the time when I’m coaching them through how to set up their note origination business and appreciate Dodd-Frank, it’s in the context of understanding what led to it. What makes it relevant is the history that led to it. Congress was given the mandate after the housing bubble burst to dig into the banking industry, particularly home loans, and find out what went wrong.
Let’s ensure that we create rules and regulations to end the Wild Wild West and predatory lending and teaser rates and all the risky features that led themselves to the housing bubble burst of ‘07 and ‘08. With that as a background, then people can appreciate, as a note originator, why we talk about Dodd-Frank constantly and how they have such bearing over of what we do.
This piece of legislation called Ability to Repay is several hundred pages long, and it’s in a portion of Dodd-Frank that speaks to all lenders. They break them down into categories. There are Fannie and Freddie lenders, and there are large-cap and small-cap lenders but even seller finance is pointed at in Dodd-Frank.
Like all good legislation, it’s incredibly ambiguous, contradictory, and vague. It meets the perfect criteria to be something that we are all underneath as having been mandated by Congress. Our business’s sole focus is to understand the eight elements of Dodd-Frank Ability to Repay and help guide all of the seller finance community in ensuring that the terms of their deals are compliant and then that the borrowers that they select and loan money to are compliant.
There’s a variety of different features in there, depending on how big the lender is and how strict you had to be in a lot of things but there were some major changes. We are talking about owner financing on the number of people that could originate without having to jump in and worry about being Dodd-Frank compliant. Wasn’t there? Is there a number or specific things?
No, that’s a misnomer. Anybody that loans any money to anyone for an owner-occupied house must meet the eight elements of ATR. They must ensure their borrower meets the Ability to Repay but if they are not a licensed RMLO, they can do up to 3 of those transactions in a 12-month period without being required to get state MLS or RMLO licensure.
That’s where the confusion comes in, and I have heard a lot of people say, “Since I’m only doing so many of these a year, I don’t have to worry about Dodd-Frank.” Not true. Here’s why you can know that that’s not true. The spirit of Dodd-Frank is making sure that there aren’t predatory lenders out there that are contributing to a high default rate, and so they care about even one borrower.
If you are selling a trailer house to even one family buying that trailer house, you are still subject to ATR and the elements of Dodd-Frank. The only exception to that is a one-off transaction where you inherited a house from mom and dad. You are not incorporated, not a note originator, and not a lender.
To keep it simple, we will say you inherited a house in another state from a relative, and all you are asked to do is liquidate the estate. You are going to try to sell that thing on owner financing one time to be done with it. That would be the only way that a person could probably feel safe in doing seller finance on an owner-occupied transaction and not potentially being scrutinized on did they vet the borrower for Ability to Repay.
I’m glad you cleared that up for a lot of folks out there because there is a lot of that. You hear people say different things with a lot of different situations, “3 and 12-month period, I don’t need it.” It’s better too because that paper is more valuable. It’s making sure you are not going to stub your toe later on.
If and when a borrower defaults and goes and gets a smart attorney, and they are everywhere this poor victim, the first thing that’s going to happen is that CFPB is going to get drugs into it. The first thing they are going to do is dig deep and review that entire transaction from top to bottom. It won’t matter that the borrower theoretically was making the payments for the first six months and then went out and got stupid, overspent his money in another area, and now he can’t make the mortgage. None of that will matter.
All that will matter is when they vet to see where the components of this transaction, compliant and legal and was the borrower legal with respect to the Ability to Repay, no other excuses are going to hold any water. One of the things that we do is produce a file that the government says that you have to retain for three-years at the end of every transaction. The CD, the Closing Disclosure, you have to retain for five years.
We produce all of that for you and build you a file that will demonstrate transparently your regard for ATR and Dodd-Frank and will be your defense file on showing how you’ve vetted your borrower. Throughout Dodd-Frank, the authors use 2 or 3 consistent pieces of verbiage. They talk constantly about talking to the lender.
Talking to all of you loan originators that the onus is on you. The languages put all throughout Dodd-Frank says, “You must employ underwriting practices that result in historically low default rates, and that’s peppered throughout the hundreds of pages. Your underwriting practices must be proven to result in historically low default rates using reasonably reliable third-party records. You must make your conclusions and decisions in a good faith effort to look out for your borrower’s best interest.”
When you boil those three themes all down together, you are looking at any transaction you do, you have the ability to be called on the carpet for that, and they won’t have to prove that you didn’t do it right. You will have to prove that you did do it, and the burden of proof will be on you as the loan originator. That’s where we step in, is that we help build these files all day, every day, seven days a week.
We have a very consistent methodical approach using the same underwriting principles and practices employed by Fannie and Freddie, FHA, and VA. When we get to the end of our underwriting file, we produce a certificate of Ability to Repay and provide you with an ATR certificate on your transaction, which will come with a ream of other due diligence that we have produced that demonstrates your methodical research in the eight elements of ATR.
Let’s dive into that because you are basically guilty until you prove otherwise with this if you screw up. No matter if the bar has a stop paying and what they signed on, you are guilty until you’ve proven yourself innocent, and that’s unfortunate. What happens is that people will file a complaint with CFPB, and CFPB will open a file on you.
The starting penalty is $50,000 for CFPB. This is important for you folks out there to know this. We have had a few CFPBs in nonperformance. People file CFPB but you get a notice from CFPB that they get a complaint filed against them. You have to provide some documentation. We were able to prove that we didn’t originate the note first and foremost. Before you bring in the invoice, isn’t there a date of loans originating after a specific timeframe that has to fall on that? What’s that date?
2010 is when Dodd-Frank was signed into law. There was an update in 2014, and they continue as congress is faithful to do to convolute, contradict, add, and take away from every law every single year. One of the big things I have to do routinely, and I do as a mortgage loan officer anyway but is constantly be reading everything that comes out with respect to all of the lending laws to ensure that we are helping you disclose according to the law and the timelines or all of our disclosures current and up to date.
Now, they say, “You have to add this to this disclosure,” and you have to have this signature on this disclosure. This set of disclosures used to be ten pages. Now it’s twelve pages because they want you to put in this and this. We keep all that current throughout the year and stay read up on that stuff because it’s changing constantly.
Even the points in a statement or you had to have 40 points on a mortgage statement that you mail out. If you were a servicing company or a mortgage with more than 4,000 loans, you had to have all compliant. That’s a pain in the ass in a lot of cases. Somebody ask me, “What are the eight points of the Ability to Repay?” Can we cover those eight points for everybody?
In the eight points, I perform multiple steps that are somewhat different from these but in general, I will rattle them off to you, and then I will talk about how we do it. When we talk about the eight points, we are talking about verifying your work history, income history, debt-to-income ratio, state-specific residual income, and 24-month positive credit history.
History of any delinquencies, defaults, encumbrances, any court orders, and then what all of your other debt would be on your credit report. The law says we must dig into these eight areas and do due diligence to ensure these borrowers. In other words, it’s not as simple as saying, “The borrower can show proof of funds that he’s got $50,000 in the bank.” He could easily make this $1,100 a month mortgage payment. No. That doesn’t fly at all.
For one thing, he could have judgments against him that are going to come clean that out and take it all away tomorrow. Your responsibility as a lender is to ensure that you dug into that and that you can, with reasonable certainty using reasonably reliable third-party records, sign off on that saying he didn’t have any judgments, liens or outstanding court orders against him. That’s what we do. We look into all those things.
We have ten questions we recommend. A lot of people would say, “How do I begin all this?” Let’s say I went and got a house, and I want to turn around and resell it at 10% on a 30-year loan. “How do I get started?” The easiest thing to do is look at our ten questions to ask every borrower, and that’s on our website. I highly recommend you always incorporate a little bit of pre-screening into vetting your borrowers because probably 90% to 95% of the time, if you incorporate those questions into your pre-screening, then you won’t take earnest money deposit. You won’t sign a purchase agreement with anybody. That’s automatically going to be a red flag that we will have to throw out.
There are a lot of them that you would think would be no-brainers but they are not if you don’t know to ask them. Social Security number or an ITIN. All borrowers must have one or the other. We get a ton that comes to us, and not until we are looking through everything that we notify the lender, “Loan application is missing and Social Security numbers. Can you get those?” Two days into it, it comes back, and it turns out they don’t have any Socials and don’t have any ITINs either but they plan to apply for them.
That’s now a dead deal. Nothing can be done about that. There’s no way in God’s green Earth to make them compliant. That costs them time, energy, and money. That could have easily been caught if they had known to ask that question. You want to begin with the ten questions to ask all of your borrowers and make sure they pass those with flying colors.
We have a few investors that have created their own little gouges using them. When they send us a loan application, they have already incorporated all those answered questions in there as proof of saying, “We know for sure, unless they are lying, they have already affirmatively answered all of these.” With the assumption that all of what your borrower told you on those ten is good to go, most of the time, your borrower is going to meet requirements.
The only reason they wouldn’t, then is that the terms of the deal are more than this borrower can support. I have even got a lot of handy quick formulas that I coach people to do on the fly that will give them a good indication ahead of time of how much their borrower can support. Some quick rule of thumb, a borrower needs to stay under a 57% debt-income ratio.
If you take their GMI, their Gross Monthly Income, and multiply it by 0.57%, that would give you the total amount of debt this borrower can carry. If you subtract the PITI of your deal, then that number that remains that’s what has to cover all other debt this borrower is going to have. When you sit down and have that conversation, you might even put out a flyer saying, “To qualify for this home we are selling, the PITI is going to be X amount.”
“You will have X amount of income after all of your other debt to be eligible for this house. If you meet those requirements, give us a call.” A lot of different ways that you can approach that thing that does a lot of your work for you so that you are not dealing with a hundred looky-loos. You are maybe only dealing with 8 or 10 people that legitimately already fit that parameter. We help people figure all that stuff out.
Are you using a Calyx report or a 1003 application? Those are normal forms used as loan officers and mortgage brokers out there.
On our website, there’s a Borrower’s Application Guide. That Borrower’s Application Guide, that guide has a link in it and goes to an automated application. You would direct your borrower there or hand your borrower that piece of paper with that link in it, and they click on it. They fill out this loan application, it comes straight to us, and then we marry it up with the documents we get from you.
The way a transaction begins is that the loan originator sends us a term sheet. That term sheet has all the terms of the deal and all the information from the lender side that we need. Once we get that, we wait to see the applications and income come in, and then we marry it all together into one file. The first thing we do is look it over and put out a needs list to the investor and to the borrowers stating everything else we need. As quickly as that all comes in, we get to work on the file.
Maybe below 57% of total DPI. When you talk about the terms of the deal, you talk about, “We are going to owner finance this house. We are going to sell it for $100,000. $10,000 down payment, 90% LTV first or 80% LT first and 10% second at these interest rates. Is that what you are talking about as far as the terms of the deal?
In lending, everything is about loan amount because the PITI is how we calculate a debt-to-income ratio. Not to talk down to anybody but to break it down in its most easily understood method. You are going to structure your deal. Let’s say you need $250,000 and want 10% at 240 months. Maybe you want a twenty-year note, and then you come up with a PITI on that. You will probably come up with a P&I, the Principal, and Interest payment. That’s what you will put on the term sheet for us.
Ideally, you know what the annual tax is as well. If you already own it, you maybe have an idea of what your annual insurance is. Those four figures compose that PITI. The other issue would be if it’s in a flood zone, it’s going to have flood insurance, which is another figure that has to go into that as well as Homeowners Association or any of those kinds of additional things that the borrower will be on the hook to pay for every month the association dues, condo or any of that.
You are taking that, principal interest tax, and insurance figure plus HOA, and you are coming up with what a monthly all-in payment is going to look like, and then that differs greatly based on things like the size of the loan amount, how much they put down and the term. If you only want a 180-month term, then it’s going to be a far bigger PITI every month than if you want a 360-term.
Another thing that we end up doing a lot when those terms are sent in, we crunch all the numbers. We don’t say your borrower doesn’t meet qualifications and close the door. We rack our brains and come up with every possible tactic we can to get your borrower approved. What I come back with when a borrower is over the URI or Under Residual Income is that I come back with a range of options. That might look like getting ahold of you and saying, “This borrower meets general requirements. They have got a two-year work history, they have got a good income history, and they can document it.”
They have the potential of fitting this deal but they are $400 a month over the debt-to-income ratio. Maybe I find one payment on their credit report that they could pay off that would bring them down or maybe I notice they are on the terms. You’ve got a 180-month term. I say at a fifteen-year term, that spikes that P&I too high.
If you are willing to drop it to a 20 or 30-year term, I calculated it, and that would get you under, and he would make it with this. Maybe we look at the APR and say, “You are at 10.5%. If you tweak the term a little bit and drop the APR to 10%, your borrower is going to squeak under.” We do a thorough job of doing everything possible to make this thing fly. It’s the last-case scenario for us to break a deal.
I would like to say it’s massaging the numbers to make it fit.
Being extremely creative helps the investor see what he doesn’t see to save the deal. Our job is to try to create a win-win, keep the borrower in, and keep the lender seller in at the same time.
That’s an important thing to realize. That’s good. For most folks, it’s black and white. There are a lot of grays. You can massage those terms to get things to work a little bit differently. You are dropping the interest rate a little bit to hit that APR down or to reduce the payment a little bit. As you said, you’ve got these low-balanced credit cards that are $400. Go pay them off, so drop your DTI to the point that makes sense down. I want to ask a question. When you look at it, and you are supposed to be able to identify that this borrower can pay for three years from now. Is it reserves in the bank? Is it money that they are making? Their DTI is lower. What happens when COVID kicks in, and people get laid off?
What is the onus on you, and what is an acceptable reason for default? We will talk about how that ties into a three-year continuance. For anybody that doesn’t know, what Scott is referring to with three-year continuance is when you vet a borrower for Ability to Repay, it’s always we look backward 2 years, and we look forward 3-years.
When we talk about your Ability to Repay into the future, we are always looking at three years. A good example would be your borrower says, “I get $600 a month in child support, and so that’s going to help carry this thing.” We crunch all the numbers and realize they won’t qualify without the child’s support, no problem. You need to know upfront to be able to ask the question, “Will that have a three-year continuance in it?”
In other words, if your youngest child is seventeen and you are counting on $600 a month in child support, that’s not legal because that does not have an expectation of a three-year continuance. Whereas if somebody says, “I get a VA disability, and I’m 55 years old, here’s my award letter, and here’s my 1099 from last year.”
You don’t have to vet a three-year continuance on that. That’s expected to continue into the future, a teamster’s pension or Social Security benefits, those things. Three-year continuance is very important. For that reason, we give very little credit for reserves in the bank because they can always be spoken for. I might write in the underwriting notes to strengthen the file to make you look better as a lender and make your resale of this note look stronger.
I may put a lot of compensating factors into the underwriting notes at the end that says some strong compensating factors are, “This borrower’s got an LTV under $75,000, 22-year work longevity history, $60,000 reserves on file in the bank, and low credit utilization.” Those are all positives for sure but in and of themselves, they don’t carry the day if there’s a red flag. To address your other issue of what happens when we vet our borrower and everything is good to go, and then a few months from now, the economy takes a turn, and he gets laid off.
Think of underwriting as a timestamp. My name and your name are on it, and the borrower’s name is on this timestamp. It doesn’t matter what happens next week as long as this timestamp shows that at the time we did the homework for you, there was no reasonable expectation that this borrower was going to be financially dependent next year.
That’s one of the reasons why seasonal employment and commissioned employment can be difficult, as can self-employment with declining annual earnings. Not to get too deep and far into the woods but to say that for any of you that start using us, I can coach you a lot on how to vet income and how to ask the right questions, and I will myself as well help you understand.
The ideal borrower is a guy that’s retired with three pensions and could commit a felony, and those pensions can’t be taken away. They have got a 6% annualized cost of living adjustment for CPI. In five more years, he gets a Social Security kick-in, and essentially nothing can happen to this guy that’s going to reduce his income. It can only go up from here but those of us in that situation are fairly rare.
Self-employed borrowers are very sketchy, and then seasonal part-time workers are even worse. We get a lot of them in this demographic. The easiest thing I can say is that if you start working with us, I will teach you a lot of that. I will help you understand what to look for and run from. Two-year work and income history is a huge issue.
Another huge issue that should be talked about and I have got a document on our website that you can find, and it’s called Understanding Loan Conditions. It’s important to understand that there are multiple aspects to loan approval, more so than just this guy’s income meets the requirement for, let’s say, how big the PITI is going to be.
Loan conditions can relate to things like creditworthiness. The loss is that we have to establish 24 months of positive creditworthiness. What does positive creditworthiness look like? Fannie and Freddie go really simple, and they draw a black line in the sand that says, “Positive credit history looks like at least 2 lines open for 6 months minimum.” No current collections and delinquencies in the last few years and a credit score over 580, and that’s their definition. If you don’t meet that, they close the door in your face.
Understanding loan conditions helps you as the lender pre-anticipate what kinds of hoops your particular borrower will likely have to jump through. What’s important about that is that I can teach you how to weave that into your interview and your pre-screening so that you don’t wait until it gets to me to find out that your borrower is going to have to provide two 12-month payment histories from the alternative credit list.
By the way, he doesn’t have any credit. His car payment is in his niece’s name, his cell phone is in his uncle’s name, and he pays his rent with cash under his mattress. That guy is an ineligible borrower, and it doesn’t matter if he makes $1 million a month. You can’t loan to him. I can help you understand that ahead of time, and that document is called Understanding Loan Conditions. It walks you through many of the scenarios that befall people in this demographic that will likely raise a flag that we will have to get around. It doesn’t mean it’s a deal breaker but they are time-consuming events, and you want to vet them ahead of time.
I will give you an easy one, a good example. Anybody with a credit score of less than 620 is going to be required to provide a VOR. It’s a twelve-month Verification of Rent proving that they have made their last twelve rent payments on time with no late. The reason for that is that the Federal Government says, “You have no business getting a home loan if you can’t even pay your rent on time.”
If you have a credit score under 620, there’s a significant suspicion as to whether or not you consistently can make your payments. When you are having that talk with your borrowers, you want to be able to go there and say, “What are we going to find when we pull your credit?” You might as well be honest because we are going to pull your credit. “Do you know your credit score?” It’s not critical that they know it but the way they respond to that is critical.
When you get that person who says, “It isn’t going to be good,” you want to dig deeper and say, “Is it likely under 620? If it’s bad, are you prepared to provide a twelve-month verification of rent from your current landlord stating how long you’ve rented, how much you pay, and them stating that you haven’t made a late payment in the last twelve months?”
You might as well do that all upfront with them because I can’t tell you how many deals get broke by we get the whole underwrite done and send out conditional loan approval saying, “Provided the borrower can do this and this.” They will meet the Ability to Repay. Everybody gets excited and jumps up and down. A week later, they got back to us and said, “We can’t produce that VOR.” Now it’s a broken deal, and the lender could have anticipated conditions like that before ever signing a purchase agreement, and that would be my advice.
Let’s nip that in the button at the front end versus doing all this work in grief.
Another good example would be on our website you will see a document called the Alternative Credit History. For anybody that doesn’t understand two-year history creditworthiness, the law says that creditworthiness is defined as 24 months of immediate past creditworthy history. Many people in this demographic are in seller finance because they have no credit.
When we punch their Social Security or their ITIN into our credit database, we get back no record found. They are off the grid. They are off the radar. That’s okay, and that’s why they are in seller finance. Fannie and Freddie shut the door in their face, and all traditional lenders do. We don’t. The law doesn’t say they have to have a credit report. The law says that we, as lenders, must ensure that they have a positive 24-month credit history.
We have devised a very complex alternative credit list. I highly recommend that you incorporate it into your borrower screening practices. While I was sitting there with my borrower saying, “Tell me about your credit and your credit history,” I’m specifically trying to find out, “Do they have any open lines of traditional credit?”
I’m going 1 of 2 ways in the algorithm with my borrower. One is a credit score above 620, and they are confident, absolutely rocks. I know it does. I’m good to go. The other one is I’m not sure what you are going to find. Hit them on a VOR and see if they could produce it. Don’t move any further until they either can or can’t. It’s the same thing. Do you have any open credit lines? Do you have car payments that are reporting to credit? Do you have any revolving credit lines? Do you have student loan debts? Do you have anything that every month you are reporting to the credit bureau? When you pull your credit, what do you find?
You are looking for either I have got some or I have none. Which way you go on the algorithm tree totally depends on the answer you get. If they have got some, then no big deal. You probably, need to say, “Do you have any current delinquencies? Do you have any open collections? Might as well tell us again because we are going to find them, and will you be prepared to address them if we do?”
When you get that guy that says, “No. We don’t have any credit at all. We do everything in cash. We work under the table, and we don’t have a single loan. There’s nothing on the credit report,” then that’s where you have to build to slap out that alternative credit list that I recommend you have in your packet. That’s got things like car insurance, utilities, cell phone, Netflix, and Hulu. There are a million of them on there.
That’s when you want to be saying to him, “Could you bring us proof of at least two of these types of vendors that you will have a twelve-month proof of payment history on? Do you pay your own utilities? Can you go down there and get proof that you’ve paid your own power bill for the last 24 months straight? Do you make your car insurance payment? Will your car insurance company State Farm write you a quick letter stating you have been a customer for five years and you’ve always paid your premiums on time?”
When you get that borrower that says, “My car insurance is in my nephew’s name, and my cell phone is in my cousin’s name,” run from them because they will never meet the requirements. I don’t care if they have $100,000 in the bank. They will never be legal to loan money to. If you incorporate Understanding Loan Conditions into your buyer pre-qualification or pre-screening process, and I know that sounds complex but if we have a discussion on the phone, I can coach you quickly and make it very simple. You will be surprised how much smarter you work and how much better the quality of the borrower you select will be if you use those things and pre-anticipate.
I always laugh because, on this end, I work with investors in all 50 states, thousands of them. It’s a little bit like being a teacher and grading kids and bringing home their homework. I don’t say this to be judgmental. I’m the dumbest guy in the room. I certainly don’t condescend when I say this other than to share what we see on our end.
I have got some investors that right away it’s like a chess game. They picked it up, and you could tell. When they send a packet, they have already got a VOR in it. They have already got two 12 months payment histories in there. They have got all this stuff that they have already pre-anticipated, and we look at it and go, “This guy is playing heads up. He already took care of all this stuff.”
I got other ones that I get 2 and 3 files a month from them, and I hope they are not reading because I won’t mention any names. Every single time they act surprised when we say, “We pulled John’s credit, and John has zero credit. We are going to have to go back to him with the alternative credit list and see if John has anything in his name in this universe that he can pay for that proves that he pays his bills. What a surprise. He doesn’t have a single thing.” They act so surprised every single time.
You guys are killing yourself. You are taking earnest money from these people. You are taking the house off the market, signing a purchase agreement, and fronting money to us to vet a file, and you didn’t do any pre-screening whatsoever. That’s not working smart. No problem here. It’s quick and easy for me. I will do it but I hate to be the bearer of bad news. I hate to be the guy that has to say every single time say, “You got another one here that has no chance of flying, and you could have asked 2 or 3 simple questions. You would have known to pass this guy on and move on to a different one.”
You brought that up. There’s a fee or cost to do this. What’s the cost of your services? I’m getting an education here. Owner finance had changed so much since when I started doing it back in 2007 and 2006. It’s totally different. It was a Wild West back than a lot of cases. It’s a lot more stuff. What are your services running?
Now bear in mind now, with a full disclaimer, I’m tied to Biden’s economy like everybody else. Most likely, inflation is knocking on my door pretty hard. We are going to raise rates. As of now, the underwrite is $559 for a full underwrite. We invoice that in two pieces. We invoice the investor $119 upfront in the form of a processing fee. That pays us to basically drop what we are doing and pull credit, hand jam ten pages of data into a database. Work up a profile, calculate DTI, and state-specific residual income, get all this borrower’s income and paperwork sent to us and do the analysis. After we do all of that, if we can approve the borrower, then we invoice the investor the final 440 for a total of $559.
I will try to answer a few questions that everybody is thinking about already. Number one is that it’s illegal for the borrower to be charged this fee. The RESPA, TILA, and ECOA. In Lending Law, Equal Credit Opportunity Act, the Truth in Lending Act, and the Real Estate Settlement Procedures Act. They have a lot to say about how we can charge borrowers. Another aspect of my business is helping you not violate the law.
The law says that you can’t charge your borrower one penny for anything except the credit report before offering them a loan. Since we provide the credit report, you can’t even charge them for that. The simplest way to understand this is that we are going to charge you a $119 processing fee to get this started. We are going to teach you to prescreen so that you don’t have that $119 go down the drain repeatedly.
You are going to take a healthy earnest money deposit from your borrower that makes sure they don’t flake out midway through the process. I recommend you take $1,000 earnest money from the borrower. Anybody that can’t come up with that is probably not going to meet requirements anyway.
What you do is you will front our fees to us, and then on the buyer’s column on the Loan Estimate and the Closing Disclosure, the LE, CD, and the settlement statement, one of the costs of loan origination for your borrowers going to be that $559 underwrite fee. You will essentially reimburse yourself forward at closing. Another thing that we can do is talk about points and fees. I can help you recoup costs by suggesting reasonable points and fees that you are legally able to charge your borrower for loan origination. That will also help you bring back some of those costs.
What are you seeing as far as origination points on average? It will vary a little bit depending on how much is the fee.
Let me tell you what you can’t do, which is probably an easier way to tell you what you can do. The law says that you can’t charge in excess of three points. That’s 3% of the loan. Loan origination cannot total more than 3%. On a $100,000 loan, your total points and fees, which are things that are viewed by the law as profit in your packet, can’t come to more than $3,000 or 3%.
With that said, it doesn’t always make good sense to charge an arbitrary amount anyway because if you are wanting to close deals and select the best borrower, a lot of times, it’s about working with me and us talking about what the borrower can afford and then helping you do a reasonable cost transference. Let’s help you get back what you need to make you whole but not necessarily get rich off the borrower on this transaction.
I want to bring that up. You said it’s three points. There are also fees in there too. If there’s an appraisal required, that would be thrown in there. Your $559. The closing costs too if you are going to have anything paid by the sum closing cost.
Not all. Think about closing costs in terms of what goes into your packet. If you don’t keep the profit, then it doesn’t count against you. You are the loan originator, and let’s say there ends up being a title transfer fee. You are not pocketing any money on the title transfer fee if the title transfer fee gets charged to the borrower in an exact amount. That’s zero tolerance. That’s one of those fees that, if it comes out to $782.43, as long as you are not charging a penny more than that, doesn’t count in your points and fees because you are not profiting off your borrowers. Anything in points and fees that could be construed as profit to the lender, then you are under that cap of points and fees. That’s the way to look at it.
Another thing that we do for you is we review all the terms of your transaction to ensure that you don’t have prohibited risky features. I will give you some examples. Prepayment penalties are not allowed in Dodd-Frank on owner-occupied. They are viewed as predatory. Balloon payments in the first 60 months are viewed as predatory.
You’ve got to give this individual some forecasting ability on when this note could come due. If you are giving somebody an 11% loan and then you are calling doing payable in twelve months, you are killing this family. You are setting them up for foreclosure. The very thing that the law says you are supposed to guard against.
What we do is we look at all the terms of your deal, and I flag anything that’s not going to be legal that’s going to reflect poorly on your business because I don’t want your business to gain the reputation of being a charlatan or a predatory lender. I’m on your team to ensure that your practices pass a sniff test and that they won’t draw unfavorable attention from the do-gooders at the Consumer Financial Protection Bureau. Once in a while, I get people getting crabby with me over some of that, but I always try to explain to them is even though it looks to you like I’m raining on your parade and I’m working on the borrower’s behalf, in reality, I work for you. I’m working to keep you out of an orange jumpsuit.
You are putting your license on that document too, that the RMLO thing you are holding hands with that lender in a lot of cases too.
With that said, let me say something that is extremely unclear in the industry, and so it’s very important that I say this. When people come to us as an RMLO, they construe the term RMLO to think that we are the originator right on all of these notes. In reality, unless you contract us to be the RMLO, we are not. An RMLO, for anybody that doesn’t speak the language, is a Residential Mortgage Loan Originator.
We are an RMLO service in terms of the industry type but our standard underwriting is not a loan origination. On the paperwork that we produce for you that your borrower will sign and take to the title company at closing and file with the county, the loan originator is you. You are hiring me to help you do it legally because you don’t specialize in it, and I do but you are the loan originator. Unless you are originating in 1 of the 18 states that we can originate in. We agree that we are going to originate it for you, and that’s a whole different fee then, and then, in that case, we do all of it.
We then do the underwriting, produce your closing disclosures, your loan disclosures, all of your Federal disclosures, all of your state-specific disclosures, and all of the closing docs like the note and mortgage. We coordinate directly with the title company or the closing attorney and take it from handshake clear to the closing table. That’s a unique surface that’s far more complex that we offer on a case-by-case basis in eighteen states, trying to gain more. I want to make sure that I defuse that potential ambiguity there that when you hire us, you are the loan originator, and you are hiring us to help keep you legal.
Where are those eighteen states?
The eighteen states where we can do full originations at this time, and this is August of 2022. In timestamp, if you talk to me next September, it will inevitably be different than it is now. We can do full originations in New York, New Jersey, Connecticut, Texas, Georgia, Florida, Michigan, Maryland, Pennsylvania, Louisiana, Delaware, Kentucky, California, North Carolina, South Carolina, Virginia, Alabama, and Ohio, and have 3 or 4 pending in the hopper.
That’s one of those services that I like to do a disclaimer on and say, “Let’s get to know each other. Send me an underwrite. Let me coach and help you,” and then bring it up in conversation later. If I wanted the full real deal and wanted full origination, could you do it in this state? What would that look like? How would that benefit me? What would that get me that I’m not getting with the underwrite? We will have that discussion.
It answers Allison’s question, “Do you originate in Georgia?”
Yes, we can. If you are wanting to originate in any of those states, I rattled off. It’s the same thing. Get ahold of me and say, “We would like to talk about your services. I’m in XYZ State. Can we talk?” You can text or email me or you can snail mail me. We will have a talk like this. I do this all day, every day, for folks. We will have a one-on-one talk like this. The conversation will be about how I can help dive into your business model and help you in the way that you need help because my service is different for each person.
Have you had a situation where the loan was challenged by CFPB where they said it wasn’t legit?
Have not and never intend to. No. The easy answer to that is that we don’t play any games. I’m willing to be unliked if I have to. As I mentioned to somebody earlier on the phone, I did a conference with a team out of Minnesota that is looking at taking on, and I told them then, “There are going to be certain things that we tell you to have to do this and this, and you can’t do this and this.”
If you can’t live with that, then we can’t do business together because we won’t bend the rules. We won’t fudge. I will give you a good example. I get people all the time saying, “We would like to hire you to underwrite but we want you to underwrite to our criteria, and we don’t want you to break a deal over certain things.” I can’t issue a certification of Ability to Repay that ensures Dodd-Frank compliance if you are asking me to look the other way and help you make it not compliant.
I can’t do it. If there’s any buddy in the crowd that is saying, “That’s a bunch of BS,” I will say this. If you call me up and say, “I want you to underwrite this file, and I’m going to loan to this guy, whether you approve it or not.” That’s okay. No problem. That’s fine. We will play the crapshoot game. You throw as much mud on the wall, and we will see how much of us we can make stick.
You pay the $119 fee. You tell me what criteria you want me to vet this borrower from. I will vet them for that criteria. If they make Dodd-Frank compliance, then we will certify it and do the whole thing for you. If they don’t, we will let you know they don’t. We will let you know where they are coming up short and what they must do to remedy it.
You can rent it to them for another year and help keeps coaching them along or you can walk away and loan them the money anyway and know that you are holding a file that’s not compliant in this one area. That’s okay. As for how we work, the integrity that we maintain, which allows you to feel confident and resell a note that’s compliant, there’s no fudging on that.
I’m glad that you brought that up. It’s important. Somebody asks, “What do you see as the average interest rate on owner finance notes?” I know it will vary a little bit but where are you seeing? Are you seeing stuff in tens? Where are you seeing stuff consistently?
Number one, it changes daily. Understand that what we are seeing now looks way different than what we were seeing last year. Everything rides on a margin. Even though you guys in seller finance aren’t bound to a necessary interest rate, you are still subconsciously following a margin. Everybody in the world does. What you pay on the capital that you are loaning, you used to pay 2.25% on that capital, now you are paying 5%. Maybe your spread was 6%.
Your business model worked out good. If you were getting it at 2.25%, you are happy at 8.25%. Now all of a sudden, you are getting it at 5%. You are no longer happy at 8.25%. With that said, understand that seller finance, even though it’s somewhat inverse, correlates very closely to Fannie and Freddie. As the APOR does this, seller finance terms do this too. Now, probably 9% to 10% is pretty consistent unless you are in a mobile home.
If you are in a mobile home, I would say 13% to 15% is pretty consistent. All of my folks that are big in mobile home businesses always tend to run higher. With the risk of not going too deep and confusing people, there are certain things that Dodd-Frank says, “If you want an interest rate above this amount, then here are these new criteria that you have to do, and here are these new hoops you have to jump through. It’s called HPML or HCM. High-Price Mortgage Loan or High-Cost Mortgage. For anybody writing notes, don’t get too wrapped around the axle on it. It’s probably easier to have a discussion.
In general, we have to flag any loans that you are doing that end up becoming HPML or HCM. HCM, in specific, a High-Cost Mortgage, is defined as any interest rate that’s 6.5% higher than the APOR or the street rate of the day. If the Fannie street rate of the day is 3%, then if you add another 6.5% to that, then that’s now flagged as a high-cost mortgage, and there are certain other conditions that we have to make sure your borrower meets to keep you out of an orange jumpsuit.
That doesn’t mean you can’t do an HCM loan. It means that you have to trust me when I say I’m watching for you and if your loan is going to be an HCM loan, then appreciate the fact that your borrowers are going to have to do this and this to make sure that you are legal. Some people think I’m busting their chops for that or making their life unnecessarily hard. Once in a while, I will have people say, “What’s the most I can charge and still stay under HCM?”
I say, “What day are you going to send it to me because tomorrow is going to be different from today? I can’t give you that number because I don’t have a crystal ball.” In general, whatever the APOR of the day is, on whatever day we push it in here, if the APOR in your interest rate a more than 6.5% apart, it could flag HCM.
If you are asking me to notify you, I do a lot of custom underwriting. If your business model is to say, “Every time we do a loan with you, let us know if it’s going to be HCM, and let us decide whether we want to reduce it or not.” No problem. I will do that, and that’s what I do for you. That’s my job but that’s one of those things. The interest rate does have some bearing on how we work for you.
The 6.5% above is that red flag number.
It’s called the risky feature, and then it triggers certain things that we have to do for you and help you ensure that your records show that you did exactly.
Can you talk about the difference in the interest rate and APR? There are two completely different things when it figures in. Most people think it’s the same thing. It’s not the same thing. Let’s define that for everybody.
When you and I talk, we want to talk about interest rates because that is the actual value that you get on your note from your buyer, when we add in annualized taxes, insurance, interest, and servicing fee, that all gets charged annual interest as well, which ends up creating an annual percentage rate, which is always higher than an interest rate.
From your standpoint in loan creation land, try to use the term interest rate. What interest rate will you be charging your borrower? We will help you legally disclose your APR. An interest rate of 6.5% might mean an APR of 6.72%. Don’t get lost in the weeds on that. Try to use the terms the right way. The legal term you want to use with your borrowers is the interest rate, and that’s the term we will help you work on, and then we will worry about legally disclosing your annual percentage rate as the law requires.
I remember being a loan officer. That was always a thing. When you get to the closing table, they say the APR, “I was probably 6.5%.” It is 6.5% but with all the fees, you are paying in APR of 6.7% or 6.8%. People get bent out of a straight.
We legally disclose that to your borrower on your behalf. The law says that your borrower has so many days of the right of rescission after they sign on the line and say, “I’m interested in a 30-year loan for $250,000 at 6.5% interest,” and you shake hands. We legally disclose that which will be the legal APR and all the things that the feds and the state tell you that you have an obligation to legally disclose to your borrower. These are the things that scare note creators. That’s a service we provide. We legally disclose that for you.
It’s important because you’ve got to have those statements in there to be a good piece of paper in a lot of cases.
Those are the things that get you a cease-and-desist order and lawsuit.
David asks a question, “The taxes are so high. They basically double the payment. Wouldn’t that mean the APR would be two times the amount of the loan percentage?” No. The taxes aren’t being paid to you, the originator. The taxes are being paid to the county.
No. Taxes, in that respect, amortized over 30 years do not contribute to an APR. No, but let’s say points and fees is a good example. If you are going to tack $3,000 in points and fees onto your borrower, that’s going to make that APR higher than that interest rate because the interest rate is the simple daily interest on the loan amount.
If you took a $250,000 loan amount at 10% interest and multiply that daily interest by 365, that’s going to be the interest rate. When you take the $3,000 loan origination, tack that to the loan amount, and amortize that over 360 months, that’s going to put a fraction more interest over 30-year amortization on that guy’s loan than the simple interest of 10% over 360 months will.
It probably sounds like gobbledygook, and you guys are probably stabbing your eyeballs with forks by now because it’s boring stuff but all I can say is you have to trust me. If somebody wants to grab a beer with me and we will do the Pythagorean theorem and work this stuff out. We can do that but all you need to know is that the difference between APR and interest rate is that APR takes into account every other expense your borrower is financing over the life of this loan. Interest rate is the simple interest on the amount you are loaning your borrower.
If the borrower were to bring cash to the table to pay these closing costs outside, that doesn’t get rolled into the APR then because they are not financing that extra amount. It’s paid at closing, and it’s a part of the down payment or extra on top of the down payment.
The simplest thing to do is to ask us for a sample LE that is the old good faith estimate. An LE is the Loan Estimate that will legally disclose the difference between the interest rate and the APR. We can get that for you to share with your borrower early on in the process.
From start to finish, on average, for the files, is it taking 30, 45 or 60 days to close an owner-finance deal for you? What’s the average amount?
I like to under-promise and overdeliver, but with that said, I will still say the best-case scenario is typically 10 to 14 business days. Realistically, we have many that we do in a week. There are a lot of issues that hinge on this. Part of it is how smooth, organized, and motivated you are as the lender. How much of my training do you use?
One of the most important qualities you can look for in a borrower is motivation level, and I have said this on a lot of podcasts. If you have a motivated borrower or you have that borrower whose attitude is open the gates and let me run, you tell me what you need, and I will have it all piled up tomorrow or on your doorstep.
You give me a list of 50 things you want from me. I will have them next week. That’s the borrower you want rather than that borrower that acts like everything is in imposition. “How am I going to go get that? Where would I get that? I’m busy. It will take me two weeks to go get that.” That’s fine but understand that that’s the flavor of urgency in closing this loan is going to have.
With that said, we have some investors that pre-anticipate their loan conditions. They bring tight clean packages to us and are cracking the whip on their borrower every time we routinely do files for them that get banged out in a week, and we are done. We have other investors that have a laissez-faire attitude, and it takes them two weeks to even get a full complete package to us.
When we do our work, we are missing this, and by the time we notify them, we are missing that. It takes the borrower another week to get it. When we finally condition the loan, it takes another two weeks for them to get with their borrower and go chase down the documents that are needed. Needless to say, I have got loans that we put out on condition a few months ago, and they are still orange in our file, meaning they are still waiting for 1 or 2 simple things to come back because when we sent that condition to the lender and the borrower, we never heard back from either of them.
One thing we don’t do well holds hands because when we are serving thousands of customers in all 50 states, we will train you or we will train your transaction coordinator to hold hands, and we still do a lot more than a bank would do. If we send you back a loan condition saying, “Congratulations. Provided your borrower will turn in a twelve-month VOR, this loan can be approved,” and we send that to you and the borrower. If we never hear back from you again, we may or may not have the time to go through our pipeline.
We have days when we get slow that we go back and say, “Let’s go back through the pipeline for the last three months and send out a status inquiry on every single one of these as a nicety.” It’s unfair to a hot to track paying customers now that I put them off to go back and tap Joe on the shoulder. He sent me one in November, and he needed one condition and never bothered to check his email.
It has been varied, and we won’t talk scores but is there a down payment that you see on average like 10% or 15%? Are you seeing people split up? If it’s less than a 20% down payment, have you seen the split in a 1st and a 2nd or all doing one 1st lane?
LTV, CLTV, and HTLV. Yes, we do. What I can tell you is that we are far more diverse in seller finance than Fannie and Freddie. Where Fannie and Freddie flat out, the model of the loan will dictate what the LTV has to, by necessity be. We must at least be at a 97.5% LTV or we will not approve the loan. In seller finance, there’s no such thing.
Your particular business model might be content doing risky ones at a higher interest rate that have 100% LTV. You’ve got no skin in the game on your borrower, and you are content with that because it’s almost the least to own, and you are content to take the property back. I have other people who stick to 90% and 10%. I have some people that’s business model is, “I like to sell partials.”
We will do 80%, 20%, and 90%, 10%, and I will sell them both out there. We will have two liens on everyone. Anything can fly. Everything runs the gamut. In seller finance, it’s hard, even in fact, to put out a rule of thumb. I try to discuss it from the standpoint of saying, “What is your individual risk tolerance, and where are you getting your capital?”
To give you an example. I have got a lot of investors that ask me to help them find other investors. They send me flyers all the time and say, “I have got a partial for $23,000 that’s going to pay 90%. Can you find me an investor for that?” I will go out and look for it. That’s going to be a situation of whoever borrows that money or loans that money to them. They are going to have to be comfortable with what that risk is. Other people have a different mechanism for generating their capital, and so maybe they are self-funded entirely and, in their group, they are content with taking the thing back. Being at 100%, LTV is fine for them.
Everybody’s business model is a little bit different. I’m always a big proponent of getting at least a 10% down payment if you don’t want to take that property because the more skin the game you get from the front end, as long as it falls in line, it’s less likely to default. If you are not at a 20% down payment doing a 1st and 2nd at the same interest rate, so it’s the same payment they did.
Having 80% first is much more attractive if they look for you to refinance in 24 months. If they have worked on their credit and they have worked on that stuff, 80% first is better to get refinance versus 90%. An 80%, 10%, you get the 80% to refinance, and you hold the 10% for cashflow without taking that in a discount in a lot of cases.
There’s literally nothing you can propose that I haven’t seen. When we talk creative finance, we are talking creative wraps, partials, seconds, balloons, ARMS, and you name it.
I’m glad you brought it. Are you seeing people do more ARMS these days or do they originate ARM loans?
We are. Bear in mind again that there are some specifics that have to be observed in Dodd-Frank for owner-occupied with respect to ARMS. It can be too complex to rattle out for the purposes of this presentation. If you have some good reason why an ARM makes good sense in your business model, and you want to talk about the feasibility of incorporating an ARM, give us a call, and we will talk about it for sure because we do them.
Question from somebody, “What if somebody is financing buying in an LLC?” Dodd-Frank is out the window. Do you still need to qualify or how does that work?
If they want to buy it through their entity, the question always goes back again, “Can it make somebody homeless? Is it still owner-occupied?” If it’s owner-occupied, they do not get around Dodd-Frank or ATR. You bet. If you want to buy a trailer house in your LLCs name but you and your family are going to live in it, we can put it in your LLC name when we are all done but this still has to meet all the same elements because if you fail to pay and they have to take it back, that’s still another family on the street.
With that said, I do a lot of underwriting for investors non-owner-occupied. If any of you are in the process of buying properties, rental properties or your customers are buying rentals from you, I can still underwrite all those, and I can still give you a good risk analysis and all that, and then I will underwrite those to your specific criteria.
If it’s non-owner-occupied, then you can say, “I’m content with their DTI being this amount, and I want to see that they have so much reserves in the bank and that they have got X disposable income every month. You tell me what to underwrite it to, and that’s what we will underwrite it to.” If it’s an owner-occupied deal, the law tells us how to underwrite that.
I wanted to bring it up. Somebody had asked that question earlier about it. You still got to go through some things, making sure the person can still sell it. If somebody’s got a rental property and they are looking for owner financing, maybe they took over the property subject to, and they have got a wrap from somebody else. Does rental income or property income figure into their ability to pay? I know that when we were originating, the most we could take would be 65% of the monthly rent to figure out there. Is there a number?
Seventy-five percent is what we figure. Net 25% for taxes, interest insurance, and overhead. What that would look like, and we deal with a lot of it. I get a lot of borrowers that come to us that already own sixteen rentals, and now they want to buy another rental. One of my investors is going to loan them money and wants them underwritten. Yes, no problem. We will look at rent rolls. We will look at executed lease agreements. We will crunch the numbers. If they are gross on $1,000 a month in rent, most of the time, they are going to get around $750 in GMI off of that.
This is good stuff there. You have been a wealth of information on the show. For anybody that’s out there, hopefully, you see the value in having Max on your team and are using Max to help you out. You are dealing with an issue. Is it okay if folks call you to pick your brain or ask a couple of questions? That’s why you have the name CallTheUnderwriter.com.
We do it all the time. Ninety percent of the time, you will be talking to me. It’s not one of those companies where you are going to have to try to work for a week to get ahold of anybody that has an actual answer. You are calling the literal phone I carry in my pocket unless I’m outside on the tractor. You are going to get me, and we are going to talk, and we are going to talk about what matters to you.
What kind of tractor?
A Kubota, of course. I’m thinking about starting another business now as a tractor rollover tester because I did that now and got launched. You can survive a Kubota rollover with a cup of coffee in your hand if you do it right but I highly unadvised it.
Another question here. Is there a minimum loan or a low-level amount that you won’t go below to owner finance?
No, because, unlike a bank that’s doing everything for profit, we are charging you a flat fee. I have done $8,000 loans.
What was that on?
It was a bridge. It was somebody that was going to have a 90%, 10% split, and they didn’t even have the down, and so the investor was going to even carry the down for them for, I believe it was maybe only 6 or 8 months. You name it. I have seen it.
I’m sure you have. How many total files have you looked at? You ever keep it up with that? It’s probably thousands and thousands.
I have had days where I looked at the same file 75 times. You are going to catch me on a bad beer day if we go there.
That’s why he pulled the hair out in those days.
Put it this way. I have looked at as many files as I treated puking patients with diarrhea over 30 years as a firefighter.
That’s a lot there. Max, thank you so much for coming on. Best way, CallTheUnderwriter.com. Go to the website. Check it up. Follow them on LinkedIn. Connect with them on there. You’ve got a great resource there for you if that’s a strategy you are looking to do. You and I know we figured to have another phone call or two afterward on some of the other things we talked about beforehand. I’m looking forward to having you on again and continuing the relationship before you.
Let me say really quick too. I’m always open to affiliate links situations and referrals. If you refer people to me, I’m willing to work with you on that. I’m also willing to refer people to you for my folks in various states. For instance, for any of your readers that are looking to loan money in South Carolina, I have a $300,000 deal in which we are looking for somebody to loan money on an owner-occupied house in South Carolina.
Get ahold of me if you want to loan money or if you know somebody that does. Those are all things I typically do for free to support the network. If you are looking to buy notes, I can put you in touch with note sellers. If you are looking to sell notes, I can put you in touch with note buyers. I can help you build notes that are specific with the intent to sell them. We do a lot of networking all the way around.
That’s the whole point of this is building a network and helping you take your business to a whole different level. Max, thank you again so much for coming on here. We look forward to talking to you some more later on.
Sounds good, Scott. Thank you very much.
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About Max Bailey
Max specializes in helping Note creators find and screen suitable borrowers to ensure investors create Federally compliant Notes.