March 30, 2025 • 96 mins
On this episode of Money Matters, brought to you by Greenberg Financial Group, we tackle a week that rattled markets and raised serious questions about what’s next for the economy. The Trump administration just slapped a 25% tariff on foreign autos, and we’re breaking down what that means—not just for the auto industry, but for investors, jobs, and consumer prices. We also dive into the April 2nd announcement and explore what could happen if more tariffs follow.
But that’s not all. This week’s inflation numbers came in hotter than expected, sparking fresh fears of stagflation—a dreaded combo of rising prices and slowing growth. We discuss what this could mean for your investments and how markets reacted to the news.
Then, we shift gears to something more personal: your financial future. We explain how our financial planning process is built to help clients—whether you're just starting out or managing significant wealth—stay on track and achieve their goals, even in turbulent times.
Finally, we round out the show with a rundown of key developments from major companies, giving you the insights you need to stay informed and make smarter money decisions.
Markets are moving. The economy is shifting. Let’s talk about how to navigate it all—with clarity and confidence.
If you would like to contact us to learn more about our firm and our process call us at 520.544.4909 or go to our website at www.Greenbergfinancial.com or email us at Contact@Greenbergfinancial.com
But that’s not all. This week’s inflation numbers came in hotter than expected, sparking fresh fears of stagflation—a dreaded combo of rising prices and slowing growth. We discuss what this could mean for your investments and how markets reacted to the news.
Then, we shift gears to something more personal: your financial future. We explain how our financial planning process is built to help clients—whether you're just starting out or managing significant wealth—stay on track and achieve their goals, even in turbulent times.
Finally, we round out the show with a rundown of key developments from major companies, giving you the insights you need to stay informed and make smarter money decisions.
Markets are moving. The economy is shifting. Let’s talk about how to navigate it all—with clarity and confidence.
If you would like to contact us to learn more about our firm and our process call us at 520.544.4909 or go to our website at www.Greenbergfinancial.com or email us at Contact@Greenbergfinancial.com
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:01):
Good morning, and welcome to the Home Solutions Show. This
is your host Andy Keel with Epic Realty and I
am joined today with Red Jackson Cross Country Mortgage.
Speaker 2 (00:13):
Good morning, read morning Andy. Thanks for having me, appreciate
the opportunity.
Speaker 1 (00:18):
Yeah, welcome back. You've been a guest on the show
many times in the past and always fun to get
a different perspective. So Jerry's doing some traveling today. Is that.
Speaker 2 (00:28):
Yeah, he's out of town, so I'm taking over for
him for the day.
Speaker 1 (00:33):
Well, excellent, So why don't we just start with a
lot of activity in the market, especially Friday was a
pretty crazy day. I want to give us a little
bit of an update on what the mortgage rates are
doing and what happened in the market last week.
Speaker 2 (00:49):
Yeah, so it was an interesting week. The Friday PCE
number is one of the big numbers of the month.
So you know, we have it all broken up as
job week. Next week it's or PCE this week. We
had the the FED meeting the week before, so we're
(01:10):
we're largely all the way through the news, or at
least the market moving news for the month of March
at this point. But you know, the Fed's favorite measure
of inflation is the PCE. It basically came in as expected,
which is which is kind of tanked the stock market
a little bit on Friday, and the ten year came down,
(01:34):
and mortgage backed securities like that, so it's favorable for
mortgage rates, so we we are. It doesn't usually pass
on immediately. It usually takes a day for that to
filter through to mortgage rates, but the week will end
up where the thirty year fixed is below seven percent.
It's trading somewhere between six point seven five and six
(01:56):
point nine to five, depending on credit score, loan to
value and all that good stuff.
Speaker 1 (02:02):
I know, Friday was kind of an interesting day because
of those PCE numbers, and of course the stock market
was down big, but the interest rates were down to
and in As of late, they tend not to go
in step rates down with the stock market down. Usually
they there's no rhyme or reason, but they've they've tended
to be a little bit more inverted and they both
(02:23):
go in the same direction here.
Speaker 2 (02:25):
The whole the whole year, Andy, I think the tone
of it is expect the unexpected, because we've had we've
had numbers come in that should be rate friendly and
rates have moved against us. We've had news come through
that's unfriendly, and all of a sudden we get an
improvement in rates. So at the moment, you've got to
kind of throw out the book and just play it
(02:47):
by ear at the moment.
Speaker 1 (02:48):
Yeah, sure, is pretty difficult to predict. Even when you
think the numbers are good, the market does something different
than what we're expecting. So I think that's kind of
the theme is expect the unexpected as you as you
mentioned with that read where are we for like VA
and FHA rates?
Speaker 2 (03:04):
So those are in the very low sixes, so you know,
we can often lock in a dip and get someone
to do a VA streamline or an FHA streamline or
a purchase transaction. Obviously the rates are almost the same.
We're seeing those down right around six percent, so almost
a full point lower than the regular conventional loan for
(03:27):
the same kind of credit score.
Speaker 1 (03:29):
So I was talking to a couple of folks over
at title company and I hear that the refinances have
really ticked up the last couple of weeks. Are you
seeing that as well?
Speaker 2 (03:40):
Absolutely so. Our plapline is forty percent and this is
actually quite indicative of the entire mortgage market. We're running
forty percent of the current loans refinances. And what's really interesting, Andy,
and this does speak to a lot of things going
on in the actual economy that we're seeing on the
(04:02):
inside is seventy percent of those refinances are cash out refinances.
Seventy percent. And what we're seeing is and I do
think this is a big reason why we've seen inflation,
and while we've seen continued consumer spending even in a
weak economy, many many clients are calling us to refinance
(04:26):
their first mortgage and their equity line, or their first
mortgage and their credit card debts, or their first mortgage
and their auto loan that's at extremely high percentage rate.
They're trying to consolidate that debt, and that's going to
be that's going to be something that is likely going
to grow in the next twelve months because the actual
(04:51):
debt load. I feel like the spending has exceeded the
income for quite some time, and it's a lot of
the equity that's in those homes has has been spent
on consumer debt. So we're seeing a lot of people
very interested in combining all of that debt load and
getting a much lower combined payment. They might lose a
(05:12):
decent interest rate on the first mortgage, but those credit
cards are over twenty percent. They're killing them on the
credit cards, So it still makes sense to consolidate, do
a cash out REFI, drop the payment down, wait for
rates to dip a little further in the next year,
and then we do a no cash out REFI on
the on the new debt load as a mortgage and
(05:33):
reduce that payment again. Wow.
Speaker 1 (05:35):
So are you seeing a lot of folks that are
And I'm guessing the terminology would be their blended rate
as they get a new cash out REFI to pay
out like some higher credit card debta is still better
than the lower interest rate on the first but the
much higher interest rate on the credit cards, the blended
rate would be a much better number. But are you
seeing like a first of like you know, a two
(05:56):
or a three or a four getting refinanced into the
sixes just so they could the cash out or is
there any.
Speaker 2 (06:02):
Run absolutely already done some of those and have a
number of those that I even put probably three or
four of those into the pipeline this week. And it's
because you know, the folks that owned homes prior to COVID,
The average sales price when they bought their house might
have been two hundred and fifty k in southern Arizona,
(06:22):
So they only had one hundred and eighty thousand during
COVID to refi, And now there's maybe sixty grand in
auto loans and credit card debts and so forth, And
the waiting of that payment is significantly higher than the
total payment on the mortgage. So for them to blend
it together and consolidate it still might be saving them
(06:46):
eight hundred. I definitely did one this week where somebody
was saving about twelve hundred dollars between the new payment
and the combined payment of their mortgage and their credit
card debts. Now, I'm not saying it's a good idea
to finance your credit cards over a thirty year period,
but to solve the cash flow problem right now, get
yourself positioned so that when rates do dip further, we
(07:10):
can do a no cash out refin and get them
an optimal rate. That's very helpful to get people out
of a difficult situation.
Speaker 1 (07:19):
Yeah, it hurts me a little bit to hear that,
but in the grand scheme of things, if you do
have a large amount of credit card debt and that's
your only viable exit strategy, it certainly beats defaulting on
the credit card debt, or especially if there's like a
job loss or some just cash flow issues. But it
just it really hurts me to hear that people are
refinancing credit card debt into a thirty year payment. I
(07:42):
know it lowers the payment, but I mean it's like, literally,
you just financed that burger for thirty years.
Speaker 2 (07:49):
Understanding, Jerry and I have been talking people out of
doing this for years. The coals continued through twenty twenty three,
twenty twenty four. We did everything we could for a
lot of clients. Some of them, some of them just
did a small equity line to take care of that problem,
and others it's just the equity line is not the
(08:10):
solution for them. They just want to do a cash out.
They'll deal with it. But we have spent a lot
of time talking people out of doing that. But for
some people it's it's kind of like the only scenario
that really works for them right now.
Speaker 1 (08:25):
Okay, and when is it a good decision to just
refinance everything into a single loan rather than doing like
a home equity line. Is there a quick rule of
thumb or any advice you could give the audience on that.
Speaker 2 (08:38):
You know, if they've got a really low combined loan
to value, which means, let's say someone only someone someone's
only got fifty grand in credit card debt and eighty
grand on the first mortgage, but the house is worth
four hundred k. Doing that as a as a single
cash out REFI is quite quite good, even if their
(09:01):
credit is not amazing because you're below sixty sixty LTV,
so you don't get a lot of credit hits for
the cash out, and they get a really good interest
rate on the first mortgage. Now if they've got it,
if they've got a lower credit score, getting an equity
line becomes quite expensive and quite difficult. The equity lines,
because it's a second mortgage in second position behind the first,
(09:24):
is far more choosy about the combined loan to value.
So we we analyze these details for our clients all day,
every day, and it has become a far more regular
situation than we used to have in the past. And
I think it's a lot of people and we know it.
(09:45):
Like the job the job market is soft, the employment
numbers are low. It's it's the continued spending. I don't
think was coming from income. A lot of it has
come from people have a lot of equity in their
homes and they have continued to spend a little bit
beyond their means.
Speaker 1 (10:05):
Okay, So I think what I'm hearing is kind of
the key things to look for is there is a
pretty big price break at about sixty percent loan to
value or less correct and credit score matters. Is that
kind of a quick way of Yeah.
Speaker 2 (10:18):
But as you get down to sixty percent and below,
the credit score is less of a piece of the puzzle.
If you're at an eighty percent cash out, which is
the maximum on a primary residence, and you've got a
lower credit score, you know it's you're not going to
get a great way. It is. It is a solution,
(10:41):
but it is not the best solution. If you're in
that sub sixty LTV. You know, we can definitely help
ease the burden of the interest rate differential between the
current first and the new first. What I will say
is you did say when's a good time to do it,
and a good time to do any of these things
is before you miss a payment before your credit gets dinged,
(11:05):
because once that happens, the equity line is situation can
kind of come off the table completely and we start
running out of options.
Speaker 1 (11:14):
That's a very good point. If you ever a thirty
day late, and that's really the key is if you
can keep your payments timely within thirty days so you
don't have that thirty day show up on your TRIBEU area,
your credit report, that makes all the difference. Thirty day
late can really I mean it can stop alone dead
in its tracks. Can it read?
Speaker 2 (11:35):
Oh absolutely, And if you've got great credit, it hurts
even more because you can go from eight hundred to
six forty in one derogatory item reporting last month. It
really can't affect the bureaus that dramatically. It does come
back over over a year to two years. Once you
get past the first year, you've recovered a large portion
(11:58):
of the credit points, but it will thank you another
year beyond that typically to catch back up to where
you were before. It really hurts your credit for a
long time. So address the problem before the credit gets hit.
Speaker 1 (12:10):
Yeah. I think that's some pretty solid advice. So let's
keep if you're running at a little short just keep
those payments to within the thirty day window. If you
have that thirty day late pay, it'll hurt. So with that,
we are coming up on a break. This is Andy
Keel with the Home Solutions Show, and we will be
right back. Hi, and welcome back to the Home Solutions Show.
(12:35):
This is your host, Andy Keel, and I'm joined again
with Red Jackson Cross Country Mortgage. Read. Would you be
so kind as to share your contact information with the audience?
Speaker 2 (12:47):
Sure, get us at the office at five to zero
five zero zero five six two six.
Speaker 1 (12:53):
And if anyone would like to get a hold of me, Andy,
my number is five two zero five. I have three
nine nine five nine one. This segment read, I wanted
to talk a little bit about We've actually had an
audience a listener question and it ties into something that
I'm working on with my business this week. We have
(13:16):
a manufactured home prior to nineteen seventy six. I believe
it was built in seventy two. And that's a key
cutoff because of as I'm sure you're well aware, whether
or not we can get FAHA or government loan financing
right read.
Speaker 2 (13:29):
Oh yeah, yeah, because it was a while left back then,
they could build them anyway they wanted to before seventy six.
Speaker 1 (13:35):
Yeah, so this was a property. We actually purchased this
because one of my business partner's moms very very mobile.
She didn't want to be she was a free spirit.
Let's say, she had her van, she liked driving around.
She wanted a place to call home base. So we
bought it for her and she has now had to
go into assisted living because her health has degraded a bit.
(13:57):
So we decided to put this property up for sale.
And it's so about one acre parcel in Marana with
It's nothing special, it's the values in the land here
and it's got an outbuilding and a manufactured home on it.
It's not going to be financeable on a conventional level
because of the age of the building. So we have
(14:19):
two choices really, I mean, yes, I know there's some
alternative financing places out there, but we'd be more than
happy to finance this one ourselves. So we advertised it
for cash or ownabile finance, and a gentleman that we
knew and actually had done some business with came forward
and said he'd like to buy this property and he
would like owner financing. So We're happy to oblige. But
(14:43):
when it comes to owner financing on a parcel of
land like this, I don't know that this is really
discussed in the market very well. There's two ways of
doing it in Arizona at least, and both of them
are perfectly viable. Both of them have advantages and disadvantages,
and I wanted to talk a little bit more about
(15:05):
what's the difference and why we would use them. So
I'm going to look at two ways of owner financing.
One is called an agreement for sale. The other is
what we would consider more traditional means, which is what
the lenders would traditional lenders would use as a note
and a deed of trust. We tend to call it
a mortgage in the slang term, but it's technically in
(15:27):
the state of Arizona not a mortgage. It is a
note a deed of trust. Those are two separate documents,
and the deed of trust is kind of a synopsis
that gets recorded for the world to see at the
county Recorder's office. The note does not typically get recorded,
So basically the terms of your loan is not made public,
(15:49):
although anybody that's a stute can kind of figure it out.
With the deed of trust. So again, what's the difference
an agreement for sale is I'll use our property for example,
So if we sell this with an agreement for sale,
the buyer is going to come in with a down
payment and we will hold legal title. The buyer will
(16:13):
get equitable title through this agreement for sale document that
is recorded at the county level. So what are the
key differences there. Well, since we hold legal title, if
the buyer defaults, we typically can take the property back
in a little bit faster timeframe. So it's not a
(16:34):
foreclosure anymore. With an agreement for sale, it is called
a forfeiture, very very different type of type of action.
So basically we send out a notice and if the
buyer doesn't pay, we have the means of recording a
new document and basically saying that the agreement for sale
(16:56):
is now no and void. We get the property back.
So it's a bit like buying a car in a way,
because when you go out and buy a car and
get a bank loan, the bank is going to keep
title to that car. It's not like they can go
drive your car. It's still your car, but you don't
have the title to it until you pay off the
bank loan. An agreement for sale is very much like that.
(17:18):
So it offers a fair bit more protection in some
cases to the seller because you can typically take the
property back. And I say typically because it's actually statutory
on how long I have to wait before I can
start the forfeiture process based on the amount of equity
that the buyer has and the property. So it's going
(17:42):
to depend a little bit. So if somebody has been
paying for years and years and years and they have
a lot of equity, I have to wait a good
bit longer. And I think that's perfectly fair, because we
don't want to somebody's been paying down a property for
ten years. We don't want to just, oh, we're taking
it back in thirty days. We have to give them
a fair bit more time. But if they missed their
(18:02):
very first payment, we can we can go a little
bit faster.
Speaker 2 (18:06):
And then of course, Andy, Andy, can you use that
option on a on a wrap?
Speaker 1 (18:13):
Yeah, so you can actually use this this on a
wrap as well. So if I if I have an
underlying loan on the property and I choose to sell
it with owner financing, I can wrap that agreement for sale.
In fact, we have done that on multiple occasions before.
Speaker 2 (18:27):
That seems like a really nice approach for a rap
because you know, you're still obligated on the on the
mortgage on the to the bank, but it's easier to
get the property back if if there is a situation.
Speaker 1 (18:40):
Yeah, it tends to be a lot easier. And then
there's another there's another aspect of that which is really helpful.
If you have someone that does a note in a
deed of trust, it is an actual foreclosure, so you
have to go through the TRUSTe sale process, which adds
a unique twist on things. Because if I'm holding the
(19:02):
note and let's say I have a high equity note
that Let's say I have one hundred thousand dollars note
on a two hundred and fifty thousand dollars house, I
have a ton of equity in the property. All right, Well,
they the owner has a ton of equity, but I
have a low loan to value in my note. Is
a better way of putting it. But if it goes
to trust e sale, pretty much the best I'm going
(19:25):
to hope for is I get my note paid for.
That equity could just go to the new buyer with
the agreement for sale. Since there's no trust e sale,
that equity goes back to me, the previous owner. So
there's a big thing there, and I know there's some
other ways around that with the note indeed of trust
(19:47):
and the trust e sale, but on the surface, it's
a fairly different process expanding out on the house. There
a right to bore the audience that might know about this,
but I thought it was worthy to talk about because
they really are two very separate types of transactions, and
(20:10):
the key difference is will I hold legal title or not?
And there's actually some downfall to that as well with
the agreement for sale. We actually had one that we
sold on agreement for sale and our buyer did a
built I don't know the details, but I think they
(20:31):
built an adu on the property, but they boo booed
and did it over too far, over to the neighbor's
property line. So there's a code violation. Guess what the
code The city's coming after me as the owner because
I still have legal title. So we were able to Yeah,
so we were able to fix that problem, and we
(20:54):
have wording in our documentation that it's clearly on the
buyer to address that issue. But basically it's that's not
a fun thing as property owner to deal with because
it's like, look, I'm effectively just the note holder, but hey,
they say, hey, you're on legal title. You're still on
the hook. Deal with it.
Speaker 2 (21:13):
Yeah. And the reason I asked you about the wrap situation, Annie,
is because you know, when we're talking raps with people.
Obviously it's not part of my daily job, but I
do some stuff personally on different types of properties. You
know that that agreement for sale keeps you on title,
(21:34):
and therefore I can't see how you would ever have
an issue with the do on sale clause being triggered
in that situation.
Speaker 1 (21:44):
Well, you certainly could, because it's a recorded document, and
as we say, the lingo is, we we are openly
and notoriously telling the world that we violated that do
on sale clause. So it's out there for the bank
to see and they could certainly call the note. What
does that mean if we violate the do on sale close, Well,
(22:06):
the bank has the right to start the foreclosure process
on us for a dou on sale violation, very much
the same way that they would have the right to
start the foreclosure process if we quit paying.
Speaker 2 (22:20):
Yeah, we don't, we don't. We don't love to hear
about that. I haven't actually heard anybody, because lots of
clients want to know, hey, can we date it into
an LLC? And obviously the answer is, you know, not
necessarily if you're if you're personally obligated on the loan,
transferring ownership to an LLC is not one of the
(22:43):
permitted vehicles that you can use to hold title without
triggering that. Have never heard of anyone actually being being
put in that position where the do on sale is triggered.
But interestingly enough, a Cross Country we actually we have
a bunch of products where we actually are closing in
(23:05):
the name of the LLC because some borrowers really want
that mortgage to be recorded in the name of the LLC,
not reported on their credit report, and not obligated on
it personally. So we never used to before we went
to Cross Country, we didn't have access to those products.
So that was why I was asking, because I was
(23:25):
interested on the do on sale for wraps and so forth.
Speaker 1 (23:30):
Yeah, and you know, that's a great product. And this
is one of the things that frustrates me working with
investors is there is a whole lot of common sense
in having the property titled in an LLC name because
it well, LLC stands for limited liability corporations, so that's
exactly what we're trying to do. We're trying to limit
our liability, and with conventional financing, it's kind of a
(23:55):
pain in the butt because we want the we want
the investor to have some protection against lawsuits. But Fanny
and Freddie basically are saying, well, here, mister investor, we
want this to be titled into your name personally, but
from a legal perspective, we really don't want that because
it's much safer for us to have it in the LLC.
So we're often playing this game where okay, we'll have
(24:18):
the property in the investor's name and then after the
fact we'll we'll ded it over to the LLC for
asset protection purposes, and you know, if they go to
buy another property lender doesn't like that, we have to
move it all back out again. So it does tend
to make a mess.
Speaker 2 (24:33):
Yeah, a little three DSS sometimes going on there with
those deals. Eighty yep.
Speaker 1 (24:38):
So and with that we are coming up on another break.
This is Andy Keel with the Home Solutions show. And
we'll be back in just a moment. Hi, and welcome
back to the Home Solutions Show. This is your host,
Andy Keel with Epic Realty and I can be reached
at five two zero five nine five nine one. I'm
(25:03):
joined again by Red Jackson Cross Country Mortgage and read
what is your number for the audience five.
Speaker 2 (25:09):
Two zero five zero zero five six.
Speaker 1 (25:12):
Two six fantastic. And the last segment, we were talking
a little bit about the difference between a note and
deed of trust and an agreement for sale in the
case of an owner finance type of transaction. And we're
talking a little bit about the the duon sale clause,
and I wanted to expand on that a little bit
for the audience. So what is the duan sale clause?
(25:35):
Brief bit of history. Bank spent a lot of money
to get this legislation in place many many years ago.
The short answer is they want the ability to call
alone if there's any kind of change in the beneficial
interest of a property. So if I was to sell
the property to someone else with one of these instruments,
(25:57):
that agreement for sale and note in need of trust,
and I didn't want to pay off my underlying loan. Technically,
I have violated the due on sale, which is usually
referred to as paragraph eighteen. And what does this really mean? Well,
it means the lender has the right to start the
foreclosure process, just like if I wasn't making payments. So
what other ways can I violate a due on sale clause? Well,
(26:21):
there's actually several. For example, any option on a property
is a violation of a due on sale class. Any
lease over three years is I think actually over two
years is a violation of the due on sale clause.
So you've got to be careful with your lease length.
I mean not like the banks are out looking for that,
but if you're going to be technical, there's a lot
(26:42):
of things you can do. Basically, any kind of a
wrap is almost certainly going to be a violation too,
So got to be careful of these. And for the
folks out there that have listened to YouTube and say, oh,
that never happens, it can. I personally have been called
into court once, and actually that was kind of fun
(27:02):
and entertaining because it was a situation where the husband
and wife had gone through a divorce. The husband signed off,
signed a per court order, signed the property over to
the wife, but she couldn't afford it and she ended
up selling the property and husband didn't like that too well.
And we didn't do anything wrong, but we got called
(27:24):
into court and had to defend ourselves and was found
that we did everything above board and there was nothing
wrong with transactions. I was quite pleased with that. That
was a good many years ago. There's a lot of
misinformation out there when it comes to these things. I'd
just like to speak from a position of knowledge, but
there's a lot of fear with you on sale, and
(27:46):
there should be because it's not always understood and used properly.
And I've actually had one lender that has tried to
call alone that we had taken we'd taken over a property.
The term is subject to the exist financing and the
lender caught wind of it, and we got a letter
in the mail saying they wanted us to REFI so,
believe it or not, all I had to do is
(28:07):
call up and they just wanted the mailing address change
back to the property addressed and they dropped the whole thing.
So you never know. Lenders are bizarre in that way.
We just never know what to expect.
Speaker 2 (28:18):
Yeah, I mean honesty in that situation, honesty was the
best policy.
Speaker 1 (28:23):
Oh exactly, it's how can I help you? What would
you like? We don't like the fact that it's the
mortgage statements going out to a different address and the property.
I said, well, if I changed it back that that'll
make the bank happy. They said, yes, So.
Speaker 2 (28:37):
I did keep making your payment and you're good.
Speaker 1 (28:41):
Yeah, the payment was always made. That was never an issue.
So at any rate, I was also talking to the
title company in regards to this. A couple of other
pointers I think that are worth mentioning is when we
do a wrap or some kind of owner financing, just
how vitally important it is to use some kind of
(29:02):
account servicing to take care of this. And I can
quote Pioneer Titles rates because I just I use them
all the time. So for one hundred dollars and twelve
dollars a month they will service a loan, or for
one hundred and fifty dollars setup fee and twenty two
dollars a month they'll service the loan including the taxes
(29:24):
and insurance to make sure the tax and insurance are
getting paid. So, I mean, just what a huge benefit
if if you do decide to sell a property with
owner financing, and you have a reputable company like Pioneer
that will actually take care of all the notices and
such on your behalf. Colleck the payments, send payments to
(29:47):
your underlying lenders, send you the difference. Whatever you want
to do, they'll do it for you. It's a really
convenient way of handling things.
Speaker 2 (29:56):
And for the buyer, you know, they get a ten
ninety eight from Pioneer for the for the mortgage interest
and the taxes and insurance paid during the year out
of that impound account. So I use it on my
transactions too, and you know I get any I get
an email saying, hey, payment's been made, here's your here's
(30:18):
your proceeds. They're getting deposited into your account. Here's what
the borrower still owes you. And they get the same
on their side. So it's it's essentially exactly what you
would get if you're dealing with the bank. So I
have all my private notes and so forth set up
with servicing because it just keeps it nice and clean,
and I'm not responsible if they want to pay me off.
(30:41):
I'm not responsible for calculating the payoff. There's never a
dispute with me about how much they actually owe me. Uh,
it's all handled by title and they get the they
get the deed release signed as soon as you kind
of go under contract, and that way, if it does
get off, they didn't have to hunt you down to
(31:01):
get you to sign the release of the deed as well.
So it's a nice clean way to do those kind
of transactions.
Speaker 1 (31:10):
Yeah, and it's so important to use a title company.
I literally just saw this situation recently where it was
a buyer and seller. The seller represented himself as an
astudent real estate investor, and the buyer didn't really know
what they were doing, but they trusted the seller. And
(31:31):
in this case, the seller really shot themselves in the
foot because they were too cheap to use a title
company and he had I saw these docks after the
fact the buyer. The buyer signed a note and a
deed of trust, but the seller, in their cheapness, didn't
bother getting them notarized. So they have a deed of
trust that can't be recorded and that it was oops.
(31:56):
So in this case, I think everything will turn out
fine because the buyer is honest individual. But if that
buyer wasn't a dishonest individual. They could literally go back
to the seller and say I don't want to pay you,
and there's really little recourse they could do in that case.
And it was actually to an LLC as well, so
they couldn't even go after them for personal liability. So
(32:18):
luckily it was I think all parties are honest here
and it'll it'll unwind just fine. But when I saw that,
I just it gave me the chills.
Speaker 2 (32:27):
Yeah, And honestly, on these private transactions, you know, you
get a little bit of title insurance as well, so
the buyer it has some security there that you know,
they're getting title to the property and it's clean. It's
totally worth spending a few bucks in doing that transaction correctly.
Speaker 1 (32:44):
Oh no doubt. I've seen some really really bad things
with people, you know, cheaping out over you know, a
seven eight hundred thousand dollars title insurance policy and it
comes back to bite them later on. It's don't don't
ever buy property without title insurance. That's just a golden
rule really. And then one other point I just wanted
to make too, is from the buyer's point of view,
(33:07):
and I'm sure you could attest to this as well.
Read if they're going to refinance that property that was
owner financed two or three years ago, they want to
show a good payment history, and an account servicer can
actually prove that payment history, and that's going to be
a lot more believable to the lender.
Speaker 2 (33:23):
Correct, Yeah, and we see this all the time. In fact,
I've got a couple of those in the pipeline right
now where they're private. They're refinancing a private note getting
near maturity and balloon is due, and we reach out
to whether it be Pioneer or Steward or First National whoever.
The title company is a service again, and they give
(33:44):
you a verification of a mortgage with a history there.
And because it's the note's not going to be the
history's not going to appear on someone's credit report like
a typical mortgage would, we're going to have to get
some other information. And it is far more credible coming
from a title company than an individual, that's for sure.
Speaker 1 (34:06):
Yeah, we've had to provide some some payment history being
a management company, and the lenders have have accepted that,
but I question how valuable it actually was, because I mean,
when they're buying a property from us and we're verifying
the history. It's like, I'm sure they take that with
a grain of salt.
Speaker 2 (34:27):
Yeah, yes, and it's very true. I mean, the inmates
are running the asylum right there, so you know there's
there's not really a third party involved. But the title,
the title round I think is is is as it's
a foldable. There's no reason why you wouldn't do that
to dot the i's across the t's.
Speaker 1 (34:46):
Yeah, and we are coming up towards the end of
the segment here. But there is one other point I
wanted to make that's a bit of a pet peeve
of mine when it comes to owner finance property because
it's also pretty misunderstood in the in the industry from
a tax preparation point of view too. So I'm if
(35:06):
I'm selling a property on owner financing, there is one
way and only one way to report this into the IRS.
And this is one of those things that I've seen
just botched up every which way. And this goes for
an agreement for sale or a note in a deed
of trust, it's an installment sale. We need to use
what's called the IRS Form sixty two fifty two. It's
(35:27):
installment sale income. So really surprised a few folks over
the years when they've said, you know, their accountant didn't
know how to handle this situation. It's like they're not
using the right form. It's that simple, guys. If you're
selling a property on Owner Finance Form sixty two to
fifty two, that is the form to use, and that's
(35:47):
what the accountants and I've seen CPAs botch this one up.
Speaker 2 (35:51):
And it does all the calculations for you too, ady.
I mean, it shows you the sales price date, the
basis that the seller had the property, and then it
kind of breaks down how that capital gain is going
to be brought back in as you receive payments on that.
So it would it would be so hard to do
that without the film. It makes no sense that tax
(36:13):
prepayers wouldn't be used an it.
Speaker 1 (36:15):
Yeah, I can't believe that that some don't, but it's
such an easy form, and again, it's such a wonderful
tool to use if you're trying to defer taxes a
nice installment sale. Basically, the gist of it is you
need to claim the income when you receive the income,
so you're you're spreading the taxes out over a number
of years, So it's a it's a huge planning tool
(36:38):
that can be used properly. So owner financing, so many,
so many useful ways of using that to your advantage.
And again with that, we are coming up on another break.
This is Andy Keel with the Home Solutions Show and
we'll be back in just a bit. And welcome back
to the Home Solutions Show. This is your host and Keel.
(37:00):
I am joined again by Reed Jackson Cross Country Mortgage.
And in the previous segment segments, we've been talking a
little bit about owner financing and some of the differences
between an agreement for sale and a note and deed
of trust. I wanted to expand on that a little
bit based on a conversation I was having with some
(37:25):
title representatives and wanted to share something that I found
a little bit alarming. Where We've been having a lot
in the news about deed fraud, but one of the
newer scams that I've heard about lately is some fraud
when it comes to probate. So basically, as I understand
(37:49):
it from the title companies, when I go and file
probate docs, they don't verify the truth behind it. I'm
signing a affidavit saying that what I'm filing is truthful.
But if I'm a fraudster who cares, they're not vetted
by the court. Is kind of the gist of it.
If Aunt Sally passes as some random person could effectively
(38:12):
come in and file a fraudulent probate and try to
get control of the deed. I'm still a little confused
on how this technically works, but the gist of what
I'm what I'd like to share with the audience today
is there is a preventative measure, and this is probably
a good idea for all of us to do. If
you go onto the county Recorder's website. I'm sorry the
(38:38):
county assessors, I was right the first time. Pardon me.
The recorder's website, so it's recorder dot Pima dot gov.
One of the ways we can prevent a lot of
this deed fraud is there is a fraud Notify Information
link on that tab or on that page that allows
(38:59):
you to basically sign up all variations of your name
and tie them tie them back to various properties that
you own. It's not going to stop the recorder from
recording something, but if you register it, you will get
notified if anything is recorded against your property. So I
thought this was a really cool idea, and I didn't
(39:21):
even know it existed until the title company told me
about it. And I thought this was really nice because
with all the horror stories we're hearing about deed fraud
out there, this is a really easy, simple way to
get notified if something gets recorded against your property. So
I really wanted to share that with the audience.
Speaker 2 (39:40):
Their counties in Arizona had the same thing.
Speaker 1 (39:43):
Yeah, and I heard that's a law that went into
effect at the beginning of the year where they have
to have this fraud guard they call it.
Speaker 2 (39:52):
I like it, you know. Every day and again, we
have a client wanted to do a refire and we
come across something on the title report and I remember
what from years ago, a lady was doing a refinancing.
This three thousand dollars lian came up and it had
a person's name there, and she says, oh, my god,
(40:13):
that was a person I went on vacation with five
years ago. And this person had somehow managed to file
a put a lien on the property for half the
cost of the vacation. So had she had something like
this set up. She would have been notified when they
were trying to attach it to the property. I'm sure,
so that is a pretty cool tip.
Speaker 1 (40:35):
Yeah, and this personally came about because we're in the
process of buying a property where there was an old
lean from nineteen eighty seven that was never cleared, and
we're in the process of getting that cleared. I don't
really anticipate a problem. It's almost for sure long and
paid off, but it's still a cloud on title. And
(40:56):
the lender that had this they tracked back, was bought
out and bought out, and eventually it landed with like
the bank that bought the other bank that bought the
other bank is now Bank of America dealing with that.
It's about a ten day delay because they're actually pretty
good about clearing this old title issue. But when our
title rep sends it over to the bank, they basically
(41:18):
say they need ten business days to address the situation
get back to us. Sometimes we have these weird things
just pop up.
Speaker 2 (41:26):
You know that just the last segment, when we were
talking about how title manages those transactions for you know,
owner carries and finance and seller finance and so forth.
They they when I am lending money to somebody, they
help me pre sign the release so that if I
disappear twenty two years from now over to New Zealand
(41:47):
and they can't find me to sign it, they already
have a copy there and they're authorized if the loan
is paid in full, to release the lean on the property.
So they've gotten a little smarter about that these days.
Speaker 1 (41:58):
Yeah, and I'll tell you that is that's actually the
reason right there that you should always use a title
company for one of these types of transactions, because that's
just yet what happens when the seller can't be found
or leaves the country or passes away twenty two years,
twenty nine years into the future. If you're dealing with
thirty year financing with no balloon, it's not at all
(42:19):
inconceivable it could go to the full thirty year term.
Speaker 2 (42:22):
Yeah, it's really hot to get to get that released
if there's nobody around to sign it.
Speaker 1 (42:27):
Yeah. So that's what the title company will do, is
they will sign these these things that will be needed
at some point in the future and literally hold them
an escrow for this potentially thirty year period until the
transaction comes to fruition or unwinds. And those documents need
to be recorded. Now, we don't have a right to
record the release until it's paid off. But what if
(42:49):
we don't find the seller or you know, it's the
errors of the seller many years in the future, we
better darnwell have that document or we've got a really
big problem.
Speaker 2 (42:58):
I think that when they're getting into these transactions because
there's just so happy to get the house, have a
decent down payment and rate negotiated with the seller, and
a lot of the time the folks getting into those
loans may don't have done this before. So they're going
in there and they're not thinking about, hey, how do
(43:20):
I gain full ownership of this property without any leans
twenty nine point nine years from now. They're just excited
to get the keys to the.
Speaker 1 (43:28):
House exactly exactly and everybody. In their excitement, they don't
think about things like that. But that's a real problem
if it's not handled properly. So one other transaction I
wanted to actually two transactions I wanted to talk about
because they were kind of side by side. I recently
bought two different properties. One of them was a solar
(43:51):
loan and the other one was owned solar with an
assumable loan on the property. For the solar loan the
least solar, believe it or not, was pretty much a
piece of cake. It only took a few days to
get that least transferred over to the new owners of
(44:12):
the property and really very very little difficulty. And I've
done a number of solar loans over the years, loans
or leases, taken over or bought properties with solar on them.
This one, frankly, was the most heinous difficult one I've
ever had to deal with, and I've been I hesitate
(44:36):
mentioning this, but it's the truth, so I'm going to
mention it. Region's Bank had a forty two thousand dollars
loan on this particular property at one point nine to
nine percent interest amortized over twenty seven years. So I
had a really strong vested interest in wanting to take
over this loan, but they literally blocked me every step
(44:59):
of the way and finally denied me because I don't
have W two income, which I find interesting, So I
apparently I'm not qualified to take over. I think it's
an eighty six dollars payment or some ridiculous member like that.
Speaker 2 (45:14):
They don't want you.
Speaker 1 (45:17):
Oh, I know, but I mean, we clearly know the
why behind it, but I think we were in the
we had by we, I mean myself, the buyer, the seller,
and uh uh the other gentleman that that was helping
us put this transaction together. Have called this lender over
(45:37):
forty times and it really got to the point where
you need to speak to a supervisor? Great, can I
speak to a supervisor? No, there's none available. Okay, how
about if I wait? Well, you'll be waiting a long time.
So they literally looped us into oblivion and it was
just downright ridiculous. So and partially sharing this with the
(46:00):
audience to vent a little bit, but I'm also just
saying this is I've been doing this a long time.
I've never been so blindsided by Solar before as this
particular situation where literally ninety days in they finally declined
us and we got it figured out. Well, we're moving
forward with the purchase. But it really hurts to pay
off that beautiful one point nine nine percent loan and
(46:21):
take it at the higher rate.
Speaker 2 (46:23):
That's that's really a crime Andy letting that go. That's
a shame.
Speaker 1 (46:29):
Yeah, So that was that was not so much fun.
So anyway that the thought out there is solar is
a wonderful thing, but not all solar companies are the
same U Some have gone very very well and we've
had others that not so great. So that's another one.
We'll reach out to title because the title companies deal
with these these companies every day, and usually your title
(46:52):
agent will be like, oh, that one's not so bad,
or they'll or they'll grown.
Speaker 2 (46:57):
Yeah, they changed, they change andy, they go in and
out of business. So the company that put the solar
panels on and financed it to begin with is being
absorbed by somebody else and then absorbed by another bank
beyond that and tracking back through there sometimes to clear
all that stuff is very difficult.
Speaker 1 (47:15):
Yeah, And actually from a lender point of view, read
do you have any recommendations when it comes to solar.
Speaker 2 (47:21):
We don't. We deal with all of them essentially, and
sometimes it's the same situation you have there is we're
trying to close alone in two weeks and the loan
process is going really really well, and the borrow was great.
We already had them pre qualified. The loan got underwritten
subject to the solar situation getting resolved, and we start
(47:45):
handing the solar lease transfer on day one of the
contract because it can sometimes take the fifteen days to
get them to move at inside the timeframe that we've
got to close the loan. So it does add a
level of difficulty with some companies.
Speaker 1 (48:05):
Agreed, But the point is, again, if you're buying or
selling a property that has either leased our own solar
on it, give it a little bit extra time. That
really is the key, and let title know about it
from the get go, because I've seen this several times,
We're getting close to closing and oops, we forgot about
the solar. It usually isn't too big of a problem,
(48:27):
but it can sometimes delay the closing a little bit.
So anyway, with that, we are actually coming up on
the end of the show. This is Andy Keel with
the Home Solutions Show and Red Jackson with Cross Country Mortgage.
Thanks for joining us on your Sunday and hope to
hear see you next week.
Good morning, and welcome to the Home Solutions Show. This
is your host Andy Keel with Epic Realty and I
am joined today with Red Jackson Cross Country Mortgage.
Speaker 2 (00:13):
Good morning, read morning Andy. Thanks for having me, appreciate
the opportunity.
Speaker 1 (00:18):
Yeah, welcome back. You've been a guest on the show
many times in the past and always fun to get
a different perspective. So Jerry's doing some traveling today. Is that.
Speaker 2 (00:28):
Yeah, he's out of town, so I'm taking over for
him for the day.
Speaker 1 (00:33):
Well, excellent, So why don't we just start with a
lot of activity in the market, especially Friday was a
pretty crazy day. I want to give us a little
bit of an update on what the mortgage rates are
doing and what happened in the market last week.
Speaker 2 (00:49):
Yeah, so it was an interesting week. The Friday PCE
number is one of the big numbers of the month.
So you know, we have it all broken up as
job week. Next week it's or PCE this week. We
had the the FED meeting the week before, so we're
(01:10):
we're largely all the way through the news, or at
least the market moving news for the month of March
at this point. But you know, the Fed's favorite measure
of inflation is the PCE. It basically came in as expected,
which is which is kind of tanked the stock market
a little bit on Friday, and the ten year came down,
(01:34):
and mortgage backed securities like that, so it's favorable for
mortgage rates, so we we are. It doesn't usually pass
on immediately. It usually takes a day for that to
filter through to mortgage rates, but the week will end
up where the thirty year fixed is below seven percent.
It's trading somewhere between six point seven five and six
(01:56):
point nine to five, depending on credit score, loan to
value and all that good stuff.
Speaker 1 (02:02):
I know, Friday was kind of an interesting day because
of those PCE numbers, and of course the stock market
was down big, but the interest rates were down to
and in As of late, they tend not to go
in step rates down with the stock market down. Usually
they there's no rhyme or reason, but they've they've tended
to be a little bit more inverted and they both
(02:23):
go in the same direction here.
Speaker 2 (02:25):
The whole the whole year, Andy, I think the tone
of it is expect the unexpected, because we've had we've
had numbers come in that should be rate friendly and
rates have moved against us. We've had news come through
that's unfriendly, and all of a sudden we get an
improvement in rates. So at the moment, you've got to
kind of throw out the book and just play it
(02:47):
by ear at the moment.
Speaker 1 (02:48):
Yeah, sure, is pretty difficult to predict. Even when you
think the numbers are good, the market does something different
than what we're expecting. So I think that's kind of
the theme is expect the unexpected as you as you
mentioned with that read where are we for like VA
and FHA rates?
Speaker 2 (03:04):
So those are in the very low sixes, so you know,
we can often lock in a dip and get someone
to do a VA streamline or an FHA streamline or
a purchase transaction. Obviously the rates are almost the same.
We're seeing those down right around six percent, so almost
a full point lower than the regular conventional loan for
(03:27):
the same kind of credit score.
Speaker 1 (03:29):
So I was talking to a couple of folks over
at title company and I hear that the refinances have
really ticked up the last couple of weeks. Are you
seeing that as well?
Speaker 2 (03:40):
Absolutely so. Our plapline is forty percent and this is
actually quite indicative of the entire mortgage market. We're running
forty percent of the current loans refinances. And what's really interesting, Andy,
and this does speak to a lot of things going
on in the actual economy that we're seeing on the
(04:02):
inside is seventy percent of those refinances are cash out refinances.
Seventy percent. And what we're seeing is and I do
think this is a big reason why we've seen inflation,
and while we've seen continued consumer spending even in a
weak economy, many many clients are calling us to refinance
(04:26):
their first mortgage and their equity line, or their first
mortgage and their credit card debts, or their first mortgage
and their auto loan that's at extremely high percentage rate.
They're trying to consolidate that debt, and that's going to
be that's going to be something that is likely going
to grow in the next twelve months because the actual
(04:51):
debt load. I feel like the spending has exceeded the
income for quite some time, and it's a lot of
the equity that's in those homes has has been spent
on consumer debt. So we're seeing a lot of people
very interested in combining all of that debt load and
getting a much lower combined payment. They might lose a
(05:12):
decent interest rate on the first mortgage, but those credit
cards are over twenty percent. They're killing them on the
credit cards, So it still makes sense to consolidate, do
a cash out REFI, drop the payment down, wait for
rates to dip a little further in the next year,
and then we do a no cash out REFI on
the on the new debt load as a mortgage and
(05:33):
reduce that payment again. Wow.
Speaker 1 (05:35):
So are you seeing a lot of folks that are
And I'm guessing the terminology would be their blended rate
as they get a new cash out REFI to pay
out like some higher credit card debta is still better
than the lower interest rate on the first but the
much higher interest rate on the credit cards, the blended
rate would be a much better number. But are you
seeing like a first of like you know, a two
(05:56):
or a three or a four getting refinanced into the
sixes just so they could the cash out or is
there any.
Speaker 2 (06:02):
Run absolutely already done some of those and have a
number of those that I even put probably three or
four of those into the pipeline this week. And it's
because you know, the folks that owned homes prior to COVID,
The average sales price when they bought their house might
have been two hundred and fifty k in southern Arizona,
(06:22):
So they only had one hundred and eighty thousand during
COVID to refi, And now there's maybe sixty grand in
auto loans and credit card debts and so forth, And
the waiting of that payment is significantly higher than the
total payment on the mortgage. So for them to blend
it together and consolidate it still might be saving them
(06:46):
eight hundred. I definitely did one this week where somebody
was saving about twelve hundred dollars between the new payment
and the combined payment of their mortgage and their credit
card debts. Now, I'm not saying it's a good idea
to finance your credit cards over a thirty year period,
but to solve the cash flow problem right now, get
yourself positioned so that when rates do dip further, we
(07:10):
can do a no cash out refin and get them
an optimal rate. That's very helpful to get people out
of a difficult situation.
Speaker 1 (07:19):
Yeah, it hurts me a little bit to hear that,
but in the grand scheme of things, if you do
have a large amount of credit card debt and that's
your only viable exit strategy, it certainly beats defaulting on
the credit card debt, or especially if there's like a
job loss or some just cash flow issues. But it
just it really hurts me to hear that people are
refinancing credit card debt into a thirty year payment. I
(07:42):
know it lowers the payment, but I mean it's like, literally,
you just financed that burger for thirty years.
Speaker 2 (07:49):
Understanding, Jerry and I have been talking people out of
doing this for years. The coals continued through twenty twenty three,
twenty twenty four. We did everything we could for a
lot of clients. Some of them, some of them just
did a small equity line to take care of that problem,
and others it's just the equity line is not the
(08:10):
solution for them. They just want to do a cash out.
They'll deal with it. But we have spent a lot
of time talking people out of doing that. But for
some people it's it's kind of like the only scenario
that really works for them right now.
Speaker 1 (08:25):
Okay, and when is it a good decision to just
refinance everything into a single loan rather than doing like
a home equity line. Is there a quick rule of
thumb or any advice you could give the audience on that.
Speaker 2 (08:38):
You know, if they've got a really low combined loan
to value, which means, let's say someone only someone someone's
only got fifty grand in credit card debt and eighty
grand on the first mortgage, but the house is worth
four hundred k. Doing that as a as a single
cash out REFI is quite quite good, even if their
(09:01):
credit is not amazing because you're below sixty sixty LTV,
so you don't get a lot of credit hits for
the cash out, and they get a really good interest
rate on the first mortgage. Now if they've got it,
if they've got a lower credit score, getting an equity
line becomes quite expensive and quite difficult. The equity lines,
because it's a second mortgage in second position behind the first,
(09:24):
is far more choosy about the combined loan to value.
So we we analyze these details for our clients all day,
every day, and it has become a far more regular
situation than we used to have in the past. And
I think it's a lot of people and we know it.
(09:45):
Like the job the job market is soft, the employment
numbers are low. It's it's the continued spending. I don't
think was coming from income. A lot of it has
come from people have a lot of equity in their
homes and they have continued to spend a little bit
beyond their means.
Speaker 1 (10:05):
Okay, So I think what I'm hearing is kind of
the key things to look for is there is a
pretty big price break at about sixty percent loan to
value or less correct and credit score matters. Is that
kind of a quick way of Yeah.
Speaker 2 (10:18):
But as you get down to sixty percent and below,
the credit score is less of a piece of the puzzle.
If you're at an eighty percent cash out, which is
the maximum on a primary residence, and you've got a
lower credit score, you know it's you're not going to
get a great way. It is. It is a solution,
(10:41):
but it is not the best solution. If you're in
that sub sixty LTV. You know, we can definitely help
ease the burden of the interest rate differential between the
current first and the new first. What I will say
is you did say when's a good time to do it,
and a good time to do any of these things
is before you miss a payment before your credit gets dinged,
(11:05):
because once that happens, the equity line is situation can
kind of come off the table completely and we start
running out of options.
Speaker 1 (11:14):
That's a very good point. If you ever a thirty
day late, and that's really the key is if you
can keep your payments timely within thirty days so you
don't have that thirty day show up on your TRIBEU area,
your credit report, that makes all the difference. Thirty day
late can really I mean it can stop alone dead
in its tracks. Can it read?
Speaker 2 (11:35):
Oh absolutely, And if you've got great credit, it hurts
even more because you can go from eight hundred to
six forty in one derogatory item reporting last month. It
really can't affect the bureaus that dramatically. It does come
back over over a year to two years. Once you
get past the first year, you've recovered a large portion
(11:58):
of the credit points, but it will thank you another
year beyond that typically to catch back up to where
you were before. It really hurts your credit for a
long time. So address the problem before the credit gets hit.
Speaker 1 (12:10):
Yeah. I think that's some pretty solid advice. So let's
keep if you're running at a little short just keep
those payments to within the thirty day window. If you
have that thirty day late pay, it'll hurt. So with that,
we are coming up on a break. This is Andy
Keel with the Home Solutions Show, and we will be
right back. Hi, and welcome back to the Home Solutions Show.
(12:35):
This is your host, Andy Keel, and I'm joined again
with Red Jackson Cross Country Mortgage. Read. Would you be
so kind as to share your contact information with the audience?
Speaker 2 (12:47):
Sure, get us at the office at five to zero
five zero zero five six two six.
Speaker 1 (12:53):
And if anyone would like to get a hold of me, Andy,
my number is five two zero five. I have three
nine nine five nine one. This segment read, I wanted
to talk a little bit about We've actually had an
audience a listener question and it ties into something that
I'm working on with my business this week. We have
(13:16):
a manufactured home prior to nineteen seventy six. I believe
it was built in seventy two. And that's a key
cutoff because of as I'm sure you're well aware, whether
or not we can get FAHA or government loan financing
right read.
Speaker 2 (13:29):
Oh yeah, yeah, because it was a while left back then,
they could build them anyway they wanted to before seventy six.
Speaker 1 (13:35):
Yeah, so this was a property. We actually purchased this
because one of my business partner's moms very very mobile.
She didn't want to be she was a free spirit.
Let's say, she had her van, she liked driving around.
She wanted a place to call home base. So we
bought it for her and she has now had to
go into assisted living because her health has degraded a bit.
(13:57):
So we decided to put this property up for sale.
And it's so about one acre parcel in Marana with
It's nothing special, it's the values in the land here
and it's got an outbuilding and a manufactured home on it.
It's not going to be financeable on a conventional level
because of the age of the building. So we have
(14:19):
two choices really, I mean, yes, I know there's some
alternative financing places out there, but we'd be more than
happy to finance this one ourselves. So we advertised it
for cash or ownabile finance, and a gentleman that we
knew and actually had done some business with came forward
and said he'd like to buy this property and he
would like owner financing. So We're happy to oblige. But
(14:43):
when it comes to owner financing on a parcel of
land like this, I don't know that this is really
discussed in the market very well. There's two ways of
doing it in Arizona at least, and both of them
are perfectly viable. Both of them have advantages and disadvantages,
and I wanted to talk a little bit more about
(15:05):
what's the difference and why we would use them. So
I'm going to look at two ways of owner financing.
One is called an agreement for sale. The other is
what we would consider more traditional means, which is what
the lenders would traditional lenders would use as a note
and a deed of trust. We tend to call it
a mortgage in the slang term, but it's technically in
(15:27):
the state of Arizona not a mortgage. It is a
note a deed of trust. Those are two separate documents,
and the deed of trust is kind of a synopsis
that gets recorded for the world to see at the
county Recorder's office. The note does not typically get recorded,
So basically the terms of your loan is not made public,
(15:49):
although anybody that's a stute can kind of figure it out.
With the deed of trust. So again, what's the difference
an agreement for sale is I'll use our property for example,
So if we sell this with an agreement for sale,
the buyer is going to come in with a down
payment and we will hold legal title. The buyer will
(16:13):
get equitable title through this agreement for sale document that
is recorded at the county level. So what are the
key differences there. Well, since we hold legal title, if
the buyer defaults, we typically can take the property back
in a little bit faster timeframe. So it's not a
(16:34):
foreclosure anymore. With an agreement for sale, it is called
a forfeiture, very very different type of type of action.
So basically we send out a notice and if the
buyer doesn't pay, we have the means of recording a
new document and basically saying that the agreement for sale
(16:56):
is now no and void. We get the property back.
So it's a bit like buying a car in a way,
because when you go out and buy a car and
get a bank loan, the bank is going to keep
title to that car. It's not like they can go
drive your car. It's still your car, but you don't
have the title to it until you pay off the
bank loan. An agreement for sale is very much like that.
(17:18):
So it offers a fair bit more protection in some
cases to the seller because you can typically take the
property back. And I say typically because it's actually statutory
on how long I have to wait before I can
start the forfeiture process based on the amount of equity
that the buyer has and the property. So it's going
(17:42):
to depend a little bit. So if somebody has been
paying for years and years and years and they have
a lot of equity, I have to wait a good
bit longer. And I think that's perfectly fair, because we
don't want to somebody's been paying down a property for
ten years. We don't want to just, oh, we're taking
it back in thirty days. We have to give them
a fair bit more time. But if they missed their
(18:02):
very first payment, we can we can go a little
bit faster.
Speaker 2 (18:06):
And then of course, Andy, Andy, can you use that
option on a on a wrap?
Speaker 1 (18:13):
Yeah, so you can actually use this this on a
wrap as well. So if I if I have an
underlying loan on the property and I choose to sell
it with owner financing, I can wrap that agreement for sale.
In fact, we have done that on multiple occasions before.
Speaker 2 (18:27):
That seems like a really nice approach for a rap
because you know, you're still obligated on the on the
mortgage on the to the bank, but it's easier to
get the property back if if there is a situation.
Speaker 1 (18:40):
Yeah, it tends to be a lot easier. And then
there's another there's another aspect of that which is really helpful.
If you have someone that does a note in a
deed of trust, it is an actual foreclosure, so you
have to go through the TRUSTe sale process, which adds
a unique twist on things. Because if I'm holding the
(19:02):
note and let's say I have a high equity note
that Let's say I have one hundred thousand dollars note
on a two hundred and fifty thousand dollars house, I
have a ton of equity in the property. All right, Well,
they the owner has a ton of equity, but I
have a low loan to value in my note. Is
a better way of putting it. But if it goes
to trust e sale, pretty much the best I'm going
(19:25):
to hope for is I get my note paid for.
That equity could just go to the new buyer with
the agreement for sale. Since there's no trust e sale,
that equity goes back to me, the previous owner. So
there's a big thing there, and I know there's some
other ways around that with the note indeed of trust
(19:47):
and the trust e sale, but on the surface, it's
a fairly different process expanding out on the house. There
a right to bore the audience that might know about this,
but I thought it was worthy to talk about because
they really are two very separate types of transactions, and
(20:10):
the key difference is will I hold legal title or not?
And there's actually some downfall to that as well with
the agreement for sale. We actually had one that we
sold on agreement for sale and our buyer did a
built I don't know the details, but I think they
(20:31):
built an adu on the property, but they boo booed
and did it over too far, over to the neighbor's
property line. So there's a code violation. Guess what the
code The city's coming after me as the owner because
I still have legal title. So we were able to Yeah,
so we were able to fix that problem, and we
(20:54):
have wording in our documentation that it's clearly on the
buyer to address that issue. But basically it's that's not
a fun thing as property owner to deal with because
it's like, look, I'm effectively just the note holder, but hey,
they say, hey, you're on legal title. You're still on
the hook. Deal with it.
Speaker 2 (21:13):
Yeah. And the reason I asked you about the wrap situation, Annie,
is because you know, when we're talking raps with people.
Obviously it's not part of my daily job, but I
do some stuff personally on different types of properties. You
know that that agreement for sale keeps you on title,
(21:34):
and therefore I can't see how you would ever have
an issue with the do on sale clause being triggered
in that situation.
Speaker 1 (21:44):
Well, you certainly could, because it's a recorded document, and
as we say, the lingo is, we we are openly
and notoriously telling the world that we violated that do
on sale clause. So it's out there for the bank
to see and they could certainly call the note. What
does that mean if we violate the do on sale close, Well,
(22:06):
the bank has the right to start the foreclosure process
on us for a dou on sale violation, very much
the same way that they would have the right to
start the foreclosure process if we quit paying.
Speaker 2 (22:20):
Yeah, we don't, we don't. We don't love to hear
about that. I haven't actually heard anybody, because lots of
clients want to know, hey, can we date it into
an LLC? And obviously the answer is, you know, not
necessarily if you're if you're personally obligated on the loan,
transferring ownership to an LLC is not one of the
(22:43):
permitted vehicles that you can use to hold title without
triggering that. Have never heard of anyone actually being being
put in that position where the do on sale is triggered.
But interestingly enough, a Cross Country we actually we have
a bunch of products where we actually are closing in
(23:05):
the name of the LLC because some borrowers really want
that mortgage to be recorded in the name of the LLC,
not reported on their credit report, and not obligated on
it personally. So we never used to before we went
to Cross Country, we didn't have access to those products.
So that was why I was asking, because I was
(23:25):
interested on the do on sale for wraps and so forth.
Speaker 1 (23:30):
Yeah, and you know, that's a great product. And this
is one of the things that frustrates me working with
investors is there is a whole lot of common sense
in having the property titled in an LLC name because
it well, LLC stands for limited liability corporations, so that's
exactly what we're trying to do. We're trying to limit
our liability, and with conventional financing, it's kind of a
(23:55):
pain in the butt because we want the we want
the investor to have some protection against lawsuits. But Fanny
and Freddie basically are saying, well, here, mister investor, we
want this to be titled into your name personally, but
from a legal perspective, we really don't want that because
it's much safer for us to have it in the LLC.
So we're often playing this game where okay, we'll have
(24:18):
the property in the investor's name and then after the
fact we'll we'll ded it over to the LLC for
asset protection purposes, and you know, if they go to
buy another property lender doesn't like that, we have to
move it all back out again. So it does tend
to make a mess.
Speaker 2 (24:33):
Yeah, a little three DSS sometimes going on there with
those deals. Eighty yep.
Speaker 1 (24:38):
So and with that we are coming up on another break.
This is Andy Keel with the Home Solutions show. And
we'll be back in just a moment. Hi, and welcome
back to the Home Solutions Show. This is your host,
Andy Keel with Epic Realty and I can be reached
at five two zero five nine five nine one. I'm
(25:03):
joined again by Red Jackson Cross Country Mortgage and read
what is your number for the audience five.
Speaker 2 (25:09):
Two zero five zero zero five six.
Speaker 1 (25:12):
Two six fantastic. And the last segment, we were talking
a little bit about the difference between a note and
deed of trust and an agreement for sale in the
case of an owner finance type of transaction. And we're
talking a little bit about the the duon sale clause,
and I wanted to expand on that a little bit
for the audience. So what is the duan sale clause?
(25:35):
Brief bit of history. Bank spent a lot of money
to get this legislation in place many many years ago.
The short answer is they want the ability to call
alone if there's any kind of change in the beneficial
interest of a property. So if I was to sell
the property to someone else with one of these instruments,
(25:57):
that agreement for sale and note in need of trust,
and I didn't want to pay off my underlying loan. Technically,
I have violated the due on sale, which is usually
referred to as paragraph eighteen. And what does this really mean? Well,
it means the lender has the right to start the
foreclosure process, just like if I wasn't making payments. So
what other ways can I violate a due on sale clause? Well,
(26:21):
there's actually several. For example, any option on a property
is a violation of a due on sale class. Any
lease over three years is I think actually over two
years is a violation of the due on sale clause.
So you've got to be careful with your lease length.
I mean not like the banks are out looking for that,
but if you're going to be technical, there's a lot
(26:42):
of things you can do. Basically, any kind of a
wrap is almost certainly going to be a violation too,
So got to be careful of these. And for the
folks out there that have listened to YouTube and say, oh,
that never happens, it can. I personally have been called
into court once, and actually that was kind of fun
(27:02):
and entertaining because it was a situation where the husband
and wife had gone through a divorce. The husband signed off,
signed a per court order, signed the property over to
the wife, but she couldn't afford it and she ended
up selling the property and husband didn't like that too well.
And we didn't do anything wrong, but we got called
(27:24):
into court and had to defend ourselves and was found
that we did everything above board and there was nothing
wrong with transactions. I was quite pleased with that. That
was a good many years ago. There's a lot of
misinformation out there when it comes to these things. I'd
just like to speak from a position of knowledge, but
there's a lot of fear with you on sale, and
(27:46):
there should be because it's not always understood and used properly.
And I've actually had one lender that has tried to
call alone that we had taken we'd taken over a property.
The term is subject to the exist financing and the
lender caught wind of it, and we got a letter
in the mail saying they wanted us to REFI so,
believe it or not, all I had to do is
(28:07):
call up and they just wanted the mailing address change
back to the property addressed and they dropped the whole thing.
So you never know. Lenders are bizarre in that way.
We just never know what to expect.
Speaker 2 (28:18):
Yeah, I mean honesty in that situation, honesty was the
best policy.
Speaker 1 (28:23):
Oh exactly, it's how can I help you? What would
you like? We don't like the fact that it's the
mortgage statements going out to a different address and the property.
I said, well, if I changed it back that that'll
make the bank happy. They said, yes, So.
Speaker 2 (28:37):
I did keep making your payment and you're good.
Speaker 1 (28:41):
Yeah, the payment was always made. That was never an issue.
So at any rate, I was also talking to the
title company in regards to this. A couple of other
pointers I think that are worth mentioning is when we
do a wrap or some kind of owner financing, just
how vitally important it is to use some kind of
(29:02):
account servicing to take care of this. And I can
quote Pioneer Titles rates because I just I use them
all the time. So for one hundred dollars and twelve
dollars a month they will service a loan, or for
one hundred and fifty dollars setup fee and twenty two
dollars a month they'll service the loan including the taxes
(29:24):
and insurance to make sure the tax and insurance are
getting paid. So, I mean, just what a huge benefit
if if you do decide to sell a property with
owner financing, and you have a reputable company like Pioneer
that will actually take care of all the notices and
such on your behalf. Colleck the payments, send payments to
(29:47):
your underlying lenders, send you the difference. Whatever you want
to do, they'll do it for you. It's a really
convenient way of handling things.
Speaker 2 (29:56):
And for the buyer, you know, they get a ten
ninety eight from Pioneer for the for the mortgage interest
and the taxes and insurance paid during the year out
of that impound account. So I use it on my
transactions too, and you know I get any I get
an email saying, hey, payment's been made, here's your here's
(30:18):
your proceeds. They're getting deposited into your account. Here's what
the borrower still owes you. And they get the same
on their side. So it's it's essentially exactly what you
would get if you're dealing with the bank. So I
have all my private notes and so forth set up
with servicing because it just keeps it nice and clean,
and I'm not responsible if they want to pay me off.
(30:41):
I'm not responsible for calculating the payoff. There's never a
dispute with me about how much they actually owe me. Uh,
it's all handled by title and they get the they
get the deed release signed as soon as you kind
of go under contract, and that way, if it does
get off, they didn't have to hunt you down to
(31:01):
get you to sign the release of the deed as well.
So it's a nice clean way to do those kind
of transactions.
Speaker 1 (31:10):
Yeah, and it's so important to use a title company.
I literally just saw this situation recently where it was
a buyer and seller. The seller represented himself as an
astudent real estate investor, and the buyer didn't really know
what they were doing, but they trusted the seller. And
(31:31):
in this case, the seller really shot themselves in the
foot because they were too cheap to use a title
company and he had I saw these docks after the
fact the buyer. The buyer signed a note and a
deed of trust, but the seller, in their cheapness, didn't
bother getting them notarized. So they have a deed of
trust that can't be recorded and that it was oops.
(31:56):
So in this case, I think everything will turn out
fine because the buyer is honest individual. But if that
buyer wasn't a dishonest individual. They could literally go back
to the seller and say I don't want to pay you,
and there's really little recourse they could do in that case.
And it was actually to an LLC as well, so
they couldn't even go after them for personal liability. So
(32:18):
luckily it was I think all parties are honest here
and it'll it'll unwind just fine. But when I saw that,
I just it gave me the chills.
Speaker 2 (32:27):
Yeah, And honestly, on these private transactions, you know, you
get a little bit of title insurance as well, so
the buyer it has some security there that you know,
they're getting title to the property and it's clean. It's
totally worth spending a few bucks in doing that transaction correctly.
Speaker 1 (32:44):
Oh no doubt. I've seen some really really bad things
with people, you know, cheaping out over you know, a
seven eight hundred thousand dollars title insurance policy and it
comes back to bite them later on. It's don't don't
ever buy property without title insurance. That's just a golden
rule really. And then one other point I just wanted
to make too, is from the buyer's point of view,
(33:07):
and I'm sure you could attest to this as well.
Read if they're going to refinance that property that was
owner financed two or three years ago, they want to
show a good payment history, and an account servicer can
actually prove that payment history, and that's going to be
a lot more believable to the lender.
Speaker 2 (33:23):
Correct, Yeah, and we see this all the time. In fact,
I've got a couple of those in the pipeline right
now where they're private. They're refinancing a private note getting
near maturity and balloon is due, and we reach out
to whether it be Pioneer or Steward or First National whoever.
The title company is a service again, and they give
(33:44):
you a verification of a mortgage with a history there.
And because it's the note's not going to be the
history's not going to appear on someone's credit report like
a typical mortgage would, we're going to have to get
some other information. And it is far more credible coming
from a title company than an individual, that's for sure.
Speaker 1 (34:06):
Yeah, we've had to provide some some payment history being
a management company, and the lenders have have accepted that,
but I question how valuable it actually was, because I mean,
when they're buying a property from us and we're verifying
the history. It's like, I'm sure they take that with
a grain of salt.
Speaker 2 (34:27):
Yeah, yes, and it's very true. I mean, the inmates
are running the asylum right there, so you know there's
there's not really a third party involved. But the title,
the title round I think is is is as it's
a foldable. There's no reason why you wouldn't do that
to dot the i's across the t's.
Speaker 1 (34:46):
Yeah, and we are coming up towards the end of
the segment here. But there is one other point I
wanted to make that's a bit of a pet peeve
of mine when it comes to owner finance property because
it's also pretty misunderstood in the in the industry from
a tax preparation point of view too. So I'm if
(35:06):
I'm selling a property on owner financing, there is one
way and only one way to report this into the IRS.
And this is one of those things that I've seen
just botched up every which way. And this goes for
an agreement for sale or a note in a deed
of trust, it's an installment sale. We need to use
what's called the IRS Form sixty two fifty two. It's
(35:27):
installment sale income. So really surprised a few folks over
the years when they've said, you know, their accountant didn't
know how to handle this situation. It's like they're not
using the right form. It's that simple, guys. If you're
selling a property on Owner Finance Form sixty two to
fifty two, that is the form to use, and that's
(35:47):
what the accountants and I've seen CPAs botch this one up.
Speaker 2 (35:51):
And it does all the calculations for you too, ady.
I mean, it shows you the sales price date, the
basis that the seller had the property, and then it
kind of breaks down how that capital gain is going
to be brought back in as you receive payments on that.
So it would it would be so hard to do
that without the film. It makes no sense that tax
(36:13):
prepayers wouldn't be used an it.
Speaker 1 (36:15):
Yeah, I can't believe that that some don't, but it's
such an easy form, and again, it's such a wonderful
tool to use if you're trying to defer taxes a
nice installment sale. Basically, the gist of it is you
need to claim the income when you receive the income,
so you're you're spreading the taxes out over a number
of years, So it's a it's a huge planning tool
(36:38):
that can be used properly. So owner financing, so many,
so many useful ways of using that to your advantage.
And again with that, we are coming up on another break.
This is Andy Keel with the Home Solutions Show and
we'll be back in just a bit. And welcome back
to the Home Solutions Show. This is your host and Keel.
(37:00):
I am joined again by Reed Jackson Cross Country Mortgage.
And in the previous segment segments, we've been talking a
little bit about owner financing and some of the differences
between an agreement for sale and a note and deed
of trust. I wanted to expand on that a little
bit based on a conversation I was having with some
(37:25):
title representatives and wanted to share something that I found
a little bit alarming. Where We've been having a lot
in the news about deed fraud, but one of the
newer scams that I've heard about lately is some fraud
when it comes to probate. So basically, as I understand
(37:49):
it from the title companies, when I go and file
probate docs, they don't verify the truth behind it. I'm
signing a affidavit saying that what I'm filing is truthful.
But if I'm a fraudster who cares, they're not vetted
by the court. Is kind of the gist of it.
If Aunt Sally passes as some random person could effectively
(38:12):
come in and file a fraudulent probate and try to
get control of the deed. I'm still a little confused
on how this technically works, but the gist of what
I'm what I'd like to share with the audience today
is there is a preventative measure, and this is probably
a good idea for all of us to do. If
you go onto the county Recorder's website. I'm sorry the
(38:38):
county assessors, I was right the first time. Pardon me.
The recorder's website, so it's recorder dot Pima dot gov.
One of the ways we can prevent a lot of
this deed fraud is there is a fraud Notify Information
link on that tab or on that page that allows
(38:59):
you to basically sign up all variations of your name
and tie them tie them back to various properties that
you own. It's not going to stop the recorder from
recording something, but if you register it, you will get
notified if anything is recorded against your property. So I
thought this was a really cool idea, and I didn't
(39:21):
even know it existed until the title company told me
about it. And I thought this was really nice because
with all the horror stories we're hearing about deed fraud
out there, this is a really easy, simple way to
get notified if something gets recorded against your property. So
I really wanted to share that with the audience.
Speaker 2 (39:40):
Their counties in Arizona had the same thing.
Speaker 1 (39:43):
Yeah, and I heard that's a law that went into
effect at the beginning of the year where they have
to have this fraud guard they call it.
Speaker 2 (39:52):
I like it, you know. Every day and again, we
have a client wanted to do a refire and we
come across something on the title report and I remember
what from years ago, a lady was doing a refinancing.
This three thousand dollars lian came up and it had
a person's name there, and she says, oh, my god,
(40:13):
that was a person I went on vacation with five
years ago. And this person had somehow managed to file
a put a lien on the property for half the
cost of the vacation. So had she had something like
this set up. She would have been notified when they
were trying to attach it to the property. I'm sure,
so that is a pretty cool tip.
Speaker 1 (40:35):
Yeah, and this personally came about because we're in the
process of buying a property where there was an old
lean from nineteen eighty seven that was never cleared, and
we're in the process of getting that cleared. I don't
really anticipate a problem. It's almost for sure long and
paid off, but it's still a cloud on title. And
(40:56):
the lender that had this they tracked back, was bought
out and bought out, and eventually it landed with like
the bank that bought the other bank that bought the
other bank is now Bank of America dealing with that.
It's about a ten day delay because they're actually pretty
good about clearing this old title issue. But when our
title rep sends it over to the bank, they basically
(41:18):
say they need ten business days to address the situation
get back to us. Sometimes we have these weird things
just pop up.
Speaker 2 (41:26):
You know that just the last segment, when we were
talking about how title manages those transactions for you know,
owner carries and finance and seller finance and so forth.
They they when I am lending money to somebody, they
help me pre sign the release so that if I
disappear twenty two years from now over to New Zealand
(41:47):
and they can't find me to sign it, they already
have a copy there and they're authorized if the loan
is paid in full, to release the lean on the property.
So they've gotten a little smarter about that these days.
Speaker 1 (41:58):
Yeah, and I'll tell you that is that's actually the
reason right there that you should always use a title
company for one of these types of transactions, because that's
just yet what happens when the seller can't be found
or leaves the country or passes away twenty two years,
twenty nine years into the future. If you're dealing with
thirty year financing with no balloon, it's not at all
(42:19):
inconceivable it could go to the full thirty year term.
Speaker 2 (42:22):
Yeah, it's really hot to get to get that released
if there's nobody around to sign it.
Speaker 1 (42:27):
Yeah. So that's what the title company will do, is
they will sign these these things that will be needed
at some point in the future and literally hold them
an escrow for this potentially thirty year period until the
transaction comes to fruition or unwinds. And those documents need
to be recorded. Now, we don't have a right to
record the release until it's paid off. But what if
(42:49):
we don't find the seller or you know, it's the
errors of the seller many years in the future, we
better darnwell have that document or we've got a really
big problem.
Speaker 2 (42:58):
I think that when they're getting into these transactions because
there's just so happy to get the house, have a
decent down payment and rate negotiated with the seller, and
a lot of the time the folks getting into those
loans may don't have done this before. So they're going
in there and they're not thinking about, hey, how do
(43:20):
I gain full ownership of this property without any leans
twenty nine point nine years from now. They're just excited
to get the keys to the.
Speaker 1 (43:28):
House exactly exactly and everybody. In their excitement, they don't
think about things like that. But that's a real problem
if it's not handled properly. So one other transaction I
wanted to actually two transactions I wanted to talk about
because they were kind of side by side. I recently
bought two different properties. One of them was a solar
(43:51):
loan and the other one was owned solar with an
assumable loan on the property. For the solar loan the
least solar, believe it or not, was pretty much a
piece of cake. It only took a few days to
get that least transferred over to the new owners of
(44:12):
the property and really very very little difficulty. And I've
done a number of solar loans over the years, loans
or leases, taken over or bought properties with solar on them.
This one, frankly, was the most heinous difficult one I've
ever had to deal with, and I've been I hesitate
(44:36):
mentioning this, but it's the truth, so I'm going to
mention it. Region's Bank had a forty two thousand dollars
loan on this particular property at one point nine to
nine percent interest amortized over twenty seven years. So I
had a really strong vested interest in wanting to take
over this loan, but they literally blocked me every step
(44:59):
of the way and finally denied me because I don't
have W two income, which I find interesting, So I
apparently I'm not qualified to take over. I think it's
an eighty six dollars payment or some ridiculous member like that.
Speaker 2 (45:14):
They don't want you.
Speaker 1 (45:17):
Oh, I know, but I mean, we clearly know the
why behind it, but I think we were in the
we had by we, I mean myself, the buyer, the seller,
and uh uh the other gentleman that that was helping
us put this transaction together. Have called this lender over
(45:37):
forty times and it really got to the point where
you need to speak to a supervisor? Great, can I
speak to a supervisor? No, there's none available. Okay, how
about if I wait? Well, you'll be waiting a long time.
So they literally looped us into oblivion and it was
just downright ridiculous. So and partially sharing this with the
(46:00):
audience to vent a little bit, but I'm also just
saying this is I've been doing this a long time.
I've never been so blindsided by Solar before as this
particular situation where literally ninety days in they finally declined
us and we got it figured out. Well, we're moving
forward with the purchase. But it really hurts to pay
off that beautiful one point nine nine percent loan and
(46:21):
take it at the higher rate.
Speaker 2 (46:23):
That's that's really a crime Andy letting that go. That's
a shame.
Speaker 1 (46:29):
Yeah, So that was that was not so much fun.
So anyway that the thought out there is solar is
a wonderful thing, but not all solar companies are the
same U Some have gone very very well and we've
had others that not so great. So that's another one.
We'll reach out to title because the title companies deal
with these these companies every day, and usually your title
(46:52):
agent will be like, oh, that one's not so bad,
or they'll or they'll grown.
Speaker 2 (46:57):
Yeah, they changed, they change andy, they go in and
out of business. So the company that put the solar
panels on and financed it to begin with is being
absorbed by somebody else and then absorbed by another bank
beyond that and tracking back through there sometimes to clear
all that stuff is very difficult.
Speaker 1 (47:15):
Yeah, And actually from a lender point of view, read
do you have any recommendations when it comes to solar.
Speaker 2 (47:21):
We don't. We deal with all of them essentially, and
sometimes it's the same situation you have there is we're
trying to close alone in two weeks and the loan
process is going really really well, and the borrow was great.
We already had them pre qualified. The loan got underwritten
subject to the solar situation getting resolved, and we start
(47:45):
handing the solar lease transfer on day one of the
contract because it can sometimes take the fifteen days to
get them to move at inside the timeframe that we've
got to close the loan. So it does add a
level of difficulty with some companies.
Speaker 1 (48:05):
Agreed, But the point is, again, if you're buying or
selling a property that has either leased our own solar
on it, give it a little bit extra time. That
really is the key, and let title know about it
from the get go, because I've seen this several times,
We're getting close to closing and oops, we forgot about
the solar. It usually isn't too big of a problem,
(48:27):
but it can sometimes delay the closing a little bit.
So anyway, with that, we are actually coming up on
the end of the show. This is Andy Keel with
the Home Solutions Show and Red Jackson with Cross Country Mortgage.
Thanks for joining us on your Sunday and hope to
hear see you next week.
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