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RE: Investment properties and Second homes

szaino — Thu, 29 Sep 2005 12:19:42 GMT

I am having a similar problem for the second time. Last time I gave up and fudged the numbers.

Borrowers are buying a new (primary residence) home. They are not going to sell their current (primary residence) home until after they buy the new home so I am getting them qualified carrying both mortgages.

On the REO section I list their current home and code it as an "R". In the "mtg payment" column i put in the P&I amount- $1779. In the "Ins/Tax/Misc" column I put in the amount of those costs- $681. The total of this is $2,460 which shows up correctly as a negative in the net rental column.

In the liabilities section, the mortgage on this current property is listed and the amount of the monthly payment (2460) is in brackets and it is checked to omit. At this point Calyx 5.1 is showing the correct front and back end ratios and payment amounts.

Proposed New 1st mortg 3122
REO negative 2460
Credit cards and other loans 2216
Total Monthly debt 7798

When this is submitted to LP, something is getting double counted. LP shows proposed amount 3122 correctly but shows total monthly debt as 8479 instead of 7798 which is 681 too high and is the same amount from the REO tax ins misc column.

If I look at the liability breakdown detail within LP it looks ok. The REO detail shows the -2460. The liabilities section is showing the corresponding mortgage to be omitted, so I don't know why LP is doubling up the 681?

RE: Investment properties and Second homes

PTLady — Fri, 09 Sep 2005 09:28:53 GMT

Freddie Mac does not like "R" for revolving remaining months . They like a definite number there. Please Replace Months remaining for all revolving debts with the number say like 60 .

I hope this helps...

RE: Investment properties and Second homes

Alliebelle — Fri, 02 Sep 2005 20:27:23 GMT

Sorry, that's not going to change anything for me. I'm pretty OCD so I fill those blanks in on every file I work up. Any other ideas?

BTW - I did go ahead and get on another computer that's still running 5.0 to re-run LP. It went through smooth as silk!

RE: Investment properties and Second homes

ChrisSauerwein — Fri, 02 Sep 2005 15:13:24 GMT

Sort of... it's duct tape, but it seems to work.

Essentially you have to ensure that every single tradeline in the liabilities section has the corresponding (M,I(L),R) AND it must have the months remaining populated. For the sake of time, I basically put 100 or 50 and each revolving account must have the (R).

Without this information, Freddie is 'assuming' that these debts don't exist because it's reading the blank as a zero and not counting the debt.

Hopefully that will help (even though it's annoying as heck to have to manually update the months remaining, at least it works until they get a fix in place).

Chris

RE: Investment properties and Second homes

Alliebelle — Fri, 02 Sep 2005 14:56:55 GMT

Did you ever find a fix for this? I'm now having the exact same problem. And I ran this file through LP on a computer running 5.0 yesterday and it worked fine.

RE: Investment properties and Second homes

Bryan Telford — Wed, 24 Aug 2005 17:15:24 GMT

I sent a private message to ChrisSauerwein to inquire more on the problem. Once the solution is found, I will post it in this forum.

RE: Investment properties and Second homes

Bryan Telford — Wed, 24 Aug 2005 07:59:38 GMT

Hi Chris,

I am researching the problem and will post a reply back here sometime today.

Bryan Telford

RE: Investment properties and Second homes

ChrisSauerwein — Tue, 23 Aug 2005 08:46:31 GMT

All of those are filled out correctly, I apologize if I'm not communicating this effectively.

The particular file that prompted me to research this is a file that was LP'd correctly (getting the correct ratios) prior to upgrading to Calyx 5.1 and is now LP'ing incorrectly after upgrading.

I am now submitting directly to Freddie via the 5.1 feature and I'm getting two different errors. 1. the "monthly payment on the primary not being included in the total debt." when I know for a fact that Calyx is updated correctly. 2. if I un-match all REO properties, I'm able to get an LP finding however it is with DRASTICALLY incorrect ratios (getting 18/19 when it should be 36/50).

Again, for clarity sake. Let me repeat. NO changes have been made to the Calyx data on the file in question other than upgrading to 5.1 and matching debts to properties on the new Freddie Mac Addendum. The Calyx file is set up exactly as it should be.

I decided to test something out by doing the same thing on a 2nd home and am getting the same error.

Chris J. Sauerwein

RE: Investment properties and Second homes

Bryan Telford — Mon, 22 Aug 2005 17:49:39 GMT

1. Go to Loan Application Page 3, in declaration l "Do you intend to occupy the property as your primary residence?" mark "N" if your borrower is purchasing an investment property. Mark "Y" if your borrower is purchasing a second home.

2. Go to Loan Application Page 2. In the Liabilities section: for a second home enter an "L" in the R/L/M field. For an investment property enter an "M"

3. At the top of Loan Application Page 2, enter the Primary Residence present housing expenses in the "Present" column for Monthly Housing Expenses.

4. Re-submit to LP.

I hope that helps.

RE: Investment properties and Second homes

BetaFisch — Mon, 22 Aug 2005 15:30:26 GMT

how exactly are you transacting with lp? by exporting to the point.frd file or by clicking the send loan to lp button?

Investment properties and Second homes

ChrisSauerwein — Mon, 22 Aug 2005 14:53:33 GMT

Ok, 2nd issue of the day.

Ever since upgrading to Calyx 5.1, I have yet to get investment properties or second homes to LP correctly. I keep getting an error message about the monthly payment on the primary not being included in the total debt.

Is there something I'm missing? Page 3 of the app is reconciled to the credit and all of the properties are matched on the new LP addendum, however LP is not reading all of the mortgage debts for some reason.

Anyone else having this type of issue? if so, what did you do to fix this.

Chris J. Sauerwein