December 19, 2024 • 29 mins
In this episode of Loan Officer Training, we explore the ins and outs of Foreign National Borrower Loans—a unique lending solution for clients without U.S. residency or credit history. Learn how to identify eligible borrowers, navigate documentation requirements, and structure loans that meet their needs.
We’ll share expert strategies, key considerations, and actionable tips to help you confidently serve this niche market and grow your business. Tune in and take your skills to the next level as you master the art of working with foreign national borrowers! 🌎✨
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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Asset Based Mortgage Programs, No Ratio CDFI Loan Programs, DSCR Investor Mortgages, Commercial Mortgages, Fix and Flip Mortgages and thousands more!
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The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as ac
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Restream recording Dec 19 (00:00):
Okay.
So I was just touching base onthat right now.
What exactly is a foreignnational borrower?
A foreign national.
A foreign national is a citizenof another country who derives
their income and permanentlyresides in a country.
outside the United States.
Now, since we do have so manyloan options at the mortgage
(00:23):
calculator, we do have anexception that's possible when
we have a dual citizen, right?
Citizen of the United States andcitizen of another country who
lives permanently outside theUnited States and basically has
created their whole life outsidethe United States.
Um, good example for this couldbe someone who was born.
(00:47):
In the U S so they have their usbased citizenship physically
born here, but they've livedtheir whole life in another
country.
And they're also a citizen ofthat country.
That's where they work.
That's where they have theirbusiness.
That's where they have theircredit.
That's where they have theirassets.
That would be a foreignnational.
And we do have an option fordual citizens that, uh,
(01:09):
basically that are foreignnationals.
Uh, now please do note, uh,there is not a credit score
requirement, nor is U.
S.
based credit required forforeign national borrowers.
Uh, we, when we, you're pricingthese out through the pricing
(01:30):
engine, uh, please do be awarethat you have to input a certain
credit score For the differentconduits that we have, right?
So you're either going to put ina 500 as the credit score to get
options from, let's say investora, B or C, and then you would
(01:52):
put a six 80 credit score to getoptions from most of the other
investors that offer fornational loans.
Um, that is simply a hack, uh,that has been set up.
By the different, uh, investorsthat we have available, uh, that
we can offer the foreignnational products, uh, to,
(02:15):
because, you know, they don'ttypically do not have a credit
score, right?
So some.
Say put 500 to get theiroptions.
Others say put 680 to get theiroptions.
See what different options youget, check the guidelines, and
then see which is the best onefor your borrower.
Now, please do note if theforeign national borrower does
(02:38):
have a credit score, then youneed to abide by the minimum
credit score and trade linerequirements for the program
guidelines, which that willapply, right?
So.
They don't have a credit.
No minimum credit is required.
But if they do have a creditscore, then you have to look at
the minimum credit scorerequirements and make sure that
(03:01):
the borrower meets thoseminimums.
Now, please do know, um, we dohave foreign national borrowers
that are from visa waivercountries, as well as foreign
national borrowers that are fromnon visa waiver countries.
What exactly does that mean?
(03:23):
And how does that affect yourborrower?
And how does that affect theloan and you, right?
Well, it has a lot to do withit.
A visa waiver country.
is a country where a, uh,foreign national does not need a
visa, a valid, unexpired visa.
They do not need it to enter theUnited States.
(03:46):
Uh, the most common example forthis would be, uh, foreign
national borrowers that arecitizens and hold a European
Union passport, for example.
Those are visa waiver countriestypically.
And borrowers, for example, thathold a Canadian passport.
That's another visa waivercountry.
(04:08):
These borrowers do not need avalid unexpired visa stamped on
their passport to gain, youknow, to be able to enter the U
S.
Which means that they would nothave to provide that in order to
be able to qualify for the loan.
Now, we do have options thatdon't require them to have a
(04:31):
visa.
If it's an investment propertyand they're not going to sign
here in the United States, then,um, you're not going to have the
requirement.
But for example, borrower from,let's say most South American,
Central American country, let'ssay Colombia.
Right.
That's one of the most popularsegments now for national
(04:52):
buyers, borrowers looking topurchase and will need financing
in the U.
S., but they need a visa.
They don't have a visa, theycan't come, they can't enter the
U.
S.
Most want to view the propertiesor at least if they need to come
sign in person, they're going toneed that visa.
And most options will require,if you're going to have an in
(05:12):
person signing, or if it's beingbrought as a second home,
they're going to require a visafor a non visa waiver country
individual.
So do be aware of that whenyou're interviewing your foreign
national borrowers, you're goingto ask where they're from,
you're going to see if that's avisa waiver or non visa waiver
country, you're going to askthem if they have a passport
(05:32):
that's valid, and you're goingto ask them if they have.
a visa if they are from a nonvisa waiver country.
Don't ask them if they have avisa if they are from like
Canada or European Union.
So make sure you do yourresearch.
Don't put the borrower on a wildgoose chase.
Uh, you always gotta, you know,show your knowledge.
Now do be aware that, uh, notall visa types are acceptable.
(05:57):
So do check the guidelines forthe option that you're choosing.
Reconcile that with the visatype that your borrower has if
they are required to have a visaand make sure that it's an
acceptable visa type.
For example, one visa type thatis not acceptable is the
diplomatic immunity visa.
(06:18):
Reason being you can't sue anyborrower that has a diplomatic
immunity visa.
So how would a bank sue them forto collect right for foreclosure
proceedings?
Um, And like I was stating, wedo have an option for expired
visa for a borrower that's froma non visa waiver country where
they have an expired visa.
(06:39):
If it's an investment propertyloan, um, When the borrower is
not signing in the U.
S.
invest in property because ofits second home.
At some point, they got to visitthe country to live here and
conform with the requirements ofthe mortgage that says second
home.
You got to occupy the property Xnumber of days or weeks or
(07:00):
months, depending on theguidelines per year.
So they definitely need a visafor that option.
But they may not need a visa forinvestment property if they're
not going to sign here in the U.
S.
if we take it through what Icall our streamlined option to
cover shortly.
So keep that in mind becausethat's a definite, uh, hold back
for some people that don't mindviewing the property by video
(07:24):
with their realtor, right?
Do a virtual showing, uh, butmaybe we're not offered the
option to close on the loan.
Without having a valid visa.
We do have that option here atthe mortgage calculator.
So what are the eligibletransactions for a foreign
(07:45):
national?
Well, We have our full docoption, right?
And I'll cover what full docmeans in a, in the next slide,
but we have our full doc option,which can be either as a second
home.
Now, remember second homes haveno pre payment penalties.
So you're probably going to havea little bit higher interest
(08:05):
rate on second home loans thanyou would on an investment
property, which could have.
You know, 1, 2, 3, 4, 5 yearprepayment penalty, which is
going to help the rate and theinvestment option would also be
the one for the, uh, no visasituation.
And full doc, we also have astreamlined option, right?
(08:29):
We have a streamlined option forfull doc and a streamlined
option for DSCR.
What exactly do I mean by astreamlined option?
Well, I'm talking about whenit's full doc, an option that
does not require creditreference letters from the
borrower.
(08:49):
So you want minimaldocumentation.
Borrower says, Hey, I'm notgoing to be able to get those
letters anytime soon.
You know, um, then we do havethe streamlined option that will
not require credit verificationletters for full doc.
And we also have the streamlinedoption for DSCR, which is our
other eligible transaction type.
(09:11):
Uh, the streamlined DSCR optionis not going to ask for a CPA
verification letter, uh, thisCPA verification letter would
not be when they ask for it.
It is not for income purposes,but to verify housing expense in
their country of origin, if theyhave a housing expense, if they
(09:32):
have a mortgage, you know whatthe taxes may be, those kinds
of, uh, those kinds of, um,Verifications are required in
most cases.
Not required in our streamlinedoption and in our streamlined
DSCR option.
Not only will we not ask for aCPA verification letter for
housing, uh, but we will not askfor a credit reference letter.
(09:57):
Also, so we could do this onethrough our no visa required
option.
Then we do have a quote unquote,and I guess we call it a non
streamline option for the DSCR,which is, again, DSCR qualifies
you on the rental incomegenerated by the public.
For the property, but in thiscase, the non streamline option
will require a CPA letter toverify the housing situation in
(10:21):
their country of origin, andthere will be a visa requirement
kind of have to have active visaon their unexpired passport.
So unexpired visa on theirunexpired passport.
So.
Uh, now as far as, uh,verification of income for the
(10:42):
full doc, I'm going to get thatin the next page when I show you
the sample letters.
But remember DSCR, you're notgoing to use any personal income
from the borrower.
And one of the things to know onthe full doc investment property
loans, keep in mind that in manycases, the guidelines will not
(11:02):
allow any income to be used fromthe subject property.
Typically on those full docinvestment loans for foreign
nationals, you're qualifyingthem on their income in their
country.
And again, that full doc couldbe an employee or it could be
self employed employee, you'regoing to get a verification
(11:26):
letter from their employer,similar to a verification of
employment, but it's going to bea sample letter with an um, you
know, like a.
Just a letter, which I'm goingto show you shortly, or if it's,
uh, if they're self employed,the full doc is going to be a
letter from their accountant.
Could be a CPA, tax preparer,uh, you know, or accountant,
(11:46):
but, you know, but in theircountry, uh, they're going to
have to have a license, right?
So we'll need some kind of alicense verification document,
uh, for, for the accountant, aswell as the verification letter
for income when they're selfemployed.
Again.
An employee is going to be averification letter from the
employer.
(12:08):
So let's get into the closing,right?
We'll talk about the sampleletters next, but let's talk
about the closing because in aforeign national loan, this is
just as important as do theyqualify as how are they going to
sign?
How are they going to close?
Remember they're In some cases,thousands and thousands and
(12:32):
different time zones away.
They need to make sure they canget a, if they're going to come
to the U.
S., they can get a plane fare orthey have to set the
appointment.
So, uh, at the embassy orconsulate.
So the closing should be plannedat the onset of the loan
application.
When you're talking about.
Do you qualify?
(12:53):
You're also going to ask, areyou going to come to the United
States to sign in person?
Do you already have a visa?
If you're going to come here, ifthey happen to be from a non
visa waiver country, um, are yougoing to sign in your country of
origin where you live?
Because then they, they need tomake appointments.
So you want to, Plan this at theonset of the loan application,
(13:13):
but at least two weeks beforethe closing is to occur, right?
Give yourself time.
So how, what are the differentways I'll break it down a little
bit more detailed here.
What are the different ways thata foreign national borrower.
Can sign.
Well, the easiest, most commonway is the signing can be in
(13:37):
person in the United States.
Right?
So with that being said, youknow, we're going to have to
have a lot of communicationgoing on between you and the
borrower, including the clear toclose and all that kind of
stuff.
You need to give them a lot ofadvanced warnings so they can
get that ticket, a plane ticket,and they can be here for the, a
lot of time that they need to behere.
(13:57):
To be able to do theirwalkthrough inspection,
hopefully of the property andthen to be able to sign.
So, you know, we sometimes getdelays.
It's hard to, it's hard to meetthe mark exactly on that day.
So we do want to make sure thatthe communication channel is
open.
Two way communication and thatwe set the expectations properly
(14:19):
and we update the borrower, uh,as soon as possible with any
changes in case they need tomake some changes to airfare,
air flight, you know, all thatkind of good stuff.
Because sometimes it's tough toget those tickets.
And making changes could costthem thousands of dollars in the
cost of the airfare or possiblylosing non refundable tickets
(14:39):
and having to purchase new ones.
And then you're going to have avery irate borrower that's going
to be asking you possibly forreimbursement of the extra fees.
So please do communicate verywell with them, uh, especially
if it's, you know, for any ofthese reasons, right?
So first option, the in person,remember visa will be required
if the borrower resides in nonvisa waiver country.
(15:00):
So you don't want it at the lastminute.
That to become an issue.
Like my visa is expiring nextweek.
So I got to close today and Igot to leave today.
So very important.
The next way that they can signis.
at a U.
S.
consulate or U.
S.
embassy outside the U.
S.
A., right?
This, again, another logisticalsituation where good
(15:22):
communication needs to be, uh,in, you know, in order because
the borrower needs to make anappoint, the appointment in
advance at this consulate orembassy, and sometimes it needs
to be months In advance, right?
Months.
You can't say like, Oh, we'reclosing next week.
Okay.
Let me make the appointment.
(15:43):
Then all of a sudden they,they'll tell you, no, I'm sorry.
They, the appointment is not forthree weeks and I got to fly 800
miles.
To the Capitol, which is theonly place where they may have a
U.
S.
embassy or consulate in aforeign country.
So do be aware of the importanceagain, communication, setting
expectations because they needto make an appointment.
(16:05):
So they may want to make thatappointment and then let you
know when it is.
And now you've got to set targetthat if you don't meet, you got
to let them know like two weeksbefore, Hey, you know, we've had
a delay in the appraisal.
I don't think we're going tomeet that day.
I think you should reset theappointment for a week later.
Can't let him know that two,three, four days before he's
(16:26):
going to close.
Hey, we got a, we got a threeday delay because of whatever
this is.
This is probably the toughestpart of the foreign national
loans is the logistics to pindown the closing date and the
borrower being available to signon that date.
Now, another solution, uh, whichis a little bit more difficult
(16:47):
for foreign nationals becauseJust due to the nature of their
being a foreign, they being aforeign national, they do not
have us based credit.
I mean, excuse me, us basedidentification.
So it becomes difficult to doremote online notarization
because remote onlinenotarization relies heavily on
being able to verify theborrower's identification
(17:11):
through third party systems,right?
And in remote, onlinenotarization.
We have the remote notary in onelocation.
We have the borrower signing inanother location and the
borrower is basically sharingtheir information with the
remote notary who say, yeah,that's you.
(17:34):
And they're going to be givingcertain notarized documents,
verifying the validity of thesignature of the borrower on
those documents.
So it's, it's a, it's a, it's aprocess.
Not always approved.
So you need to make sure that ifyou plan to use remote online
(17:54):
notarization, coordinate that atthe onset of the application, as
soon as possible to confirm thedetails.
You want to make sure that theinvestor or lender funding, the
loan, the investor, we'reselling the loan to, or if
you're going wholesale, thelender that's funding the loan,
you need to make sure that theyapprove and accept it.
Remote online notarization.
(18:15):
So whoever you're using for theremote online notarization needs
to be submitted for theirapproval.
And then most importantly, thetitle company needs to approve
the remote online notarizationprocess because many title
company underwriters, for thereason that it's hard to do
(18:35):
third party verification of theidentification of a foreign
national.
Most title company underwriterswill not.
Approve and accept remote onlinenotarization.
So you may think you're cool.
You're great because, Hey, it'sawesome.
And, uh, we're going to close,uh, because I found, uh, uh, a
(18:56):
remote online notary and theinvestor accepts it, but then
you forget to check with thetitle company.
And then when title says, okay,I mean, uh, how are these docs
signed?
And maybe you didn't even tellthe title company.
They sent the docs to the barthinking they were going to sign
somewhere that was approved.
You know, like at a consulate orembassy and all of a sudden they
get a package back signed byIran, remote online notary, or
(19:19):
approved by remote onlinenotary, and they're like, wait a
minute, we didn't approve this.
This is an invalid closing.
This has to be done all overagain, and you know, that's a
logistical nightmare.
You know, which could delay yourdeal a week or two weeks, so
imagine going to the seller andsaying, we really didn't close,
we need a week or two weeksmore.
That's going to be apredicament.
(19:41):
And the last option that couldbe used for signing is the, is,
uh, apostille notarization,right?
Apostille is a certificate thatcertifies the signature of a
public official on a documentfor use in another country.
(20:01):
So borrower could go to thepublic official.
Cool.
In the foreign country.
And if that public official canproduce an APA steel to certify
the signature and all thosedocuments, it's actually being
the borrower.
And if the APA steel quoteunquote, notarization is
accepted by the title companyand is accepted by the investor
(20:23):
or the lender, then you coulduse it.
But notice what I'm, what I'mmentioning is that they have to
approve the process just likethey have to approve the remote
online notarization.
process.
So definitely in person orconsulate embassy is the
preferred route.
We do have the other two routesas potential options, but the
(20:44):
main point is, uh, make surethat you coordinate this at the
very beginning of thetransaction.
And, uh, Oh, I got my clear toclose.
Let's get everybody ready toclose.
You're setting appointments andyou haven't realized the
logistical situation of tryingto get a foreign national
borrower to close.
And now you're in a pickletrying to figure out how you're
(21:05):
going to close this deal andfund it.
Oh, and on top of that, I didn'tmention, right.
Your rate lock's going to expirein three days.
You're used to, yeah, they'regoing to sign tomorrow.
I have my package tomorrow, theday after.
Nope.
If that package got emailed ornot emailed, got sent to that
borrower and they're in Franceand they're signing in France,
that package now needs to getcouriered, you know, we're going
(21:27):
to ask them to scan it obviouslyand email it for review, the
signature docs at least so thattitle company could say, yep,
you signed everything properly.
Now you can send us the packageor they may say, Hey, you missed
this and this and this, you gotto go back because you missed
something.
So now they got to go back anddo the appointment again and all
that kind of stuff.
And then once everything isproperly signed and confirms
(21:50):
probably signed, then they'regoing to send back by curve.
We are usually DHL, which is apopular one for overseas.
They're going to send back thepackage by DHL and it's not
overnight.
Even though they may sayovernight, it's going to be like
three days for it to get to thetitle company bar.
I need to go drop it off.
Who knows what time to drop itoff.
So, then it needs to get here tothe US.
Then, it needs to getdistributed by from the airport
(22:12):
eventually to where it's goingto go to the title company and
then once the title company hasit, then they upload the package
to the portal of the investorand now possibly, you know, the
clock stops ticking on that ratelock So, I could be a week or
more just trying to get thatwhole thing finalized.
Get that closing finalized andyour rate lock has to be good
(22:34):
throughout that whole time.
So a lot of moving pieces to theforeign national borrower that
has nothing to do with theircredit or income or appraisal or
title has to do with justclosing the deal because of the
logistics involved in all ofthese different components of
the transaction.
(22:54):
So plan the closing.
So last but not least, let'slook at some of the documents
that we're going to need, right?
I'm sharing with you here asample income letter for a self
employed borrower right now.
This was from one of ourinvestors that has good for
national resources.
They give a sample letters thatwe can provide.
(23:16):
Um, to the accountant where theycan then put it on their
letterhead and add anything elsethat they feel, but it's
basically fill in the blank withthe main information that we
need, right?
The date, borrower's name,passport number, the company
that they own, since when theyowned it, their percentage of
ownership in the company, whatthe main business of the company
(23:37):
is, if they have a website.
And the income for the borrowerfor the last two years, the
2022, for example, is two yearsprior, 2023, one year prior in
the year to date income for2024.
And then they provide that ontheir letterhead.
We get their CPA or theiraccountant license information.
(23:57):
Hopefully they can actuallyprovide a certificate because
it's pretty tough for us toverify a foreign national
license.
So if they give us a businesslicense already, that's, that's
the best.
And then most importantly, ifthe document is not in English,
which we prefer them to comeinto English to expedite, then
it needs to be translated.
Uh, to English by a certifiedtranslator.
(24:19):
You can't just get it yourselfbecause you know English and
Spanish and translate it has tobe a certified translator.
That's going to put your seal onit, verifying the authenticity
of the translation, veryimportant because all docs need
to be in English.
So this is our sample letter.
When the borrower is selfemployed, I guess our sample CPA
(24:40):
letter, then here's our sampleletter for an employee.
Very similar to the CPA letter,but this is for an employee,
right?
Hourly salary.
We don't need tax returnsthrough the, uh, you know, most
of our options for these selfemployed borrowers.
We just need this letter.
We don't even really need paystubs.
We just need this letter.
So very simple to whom I mayconcern.
(25:03):
To inform that borrower X withID number Y has been employed
with company Z since, andthere's a higher date, what
their position is, their 2022income, 2023 income, what their
monthly salary or monthly incomeis.
And their year to date incomeand the, and if the
(25:24):
probabilities, uh, theprobability of continued
employment is good, right?
Like John Smith, his probabilityof continued employment is very
good.
He, she valued employeesincerely, same thing, uh,
needs, and this is for, from anemployer outside the U S
remember no inside the U Sincome can be used, needs to be
on company letterhead andtranslated to English, even any
(25:47):
other language.
And then last but not least.
They like to call it a bankreference letter, but this can
actually be used as a creditreference letter.
Now, do remember the following.
If we're going with one of ourstreamlined Apple doc or DSCR
(26:07):
or, or, or, or, you know, fulldoc investment, uh, which is
also available streamline this,uh, you know, we don't need any
credit reference.
So this letter would not beapplicable.
Very simple, letter conformsthat the borrower with a
passport number, uh, XYZ hasbeen banking with the bank name
(26:27):
since what date, their name, thechecking account number, what
the balance is, and that, youknow, they have fulfilled all
the obligations and that theyvalue the business relationship
that they have with them.
Very basic fill in the blankkind of stuff again.
This is used for creditreferences, needs to be in
English or translated to Englishby a certified translator, needs
(26:47):
to be on their letterheadreflecting their phone number
address.
And again, as a reminder, thiswon't be needed if you're using
one of our streamlined options.
All right.
So covered a lot of, uh,information here with you today
and wanted to know anyquestions, uh, for nationals,
(27:08):
great loan, very fast growingsegment of the market, along
with it and, and obviously DSCRand bank statement loans.
So it has to be, you know, I'mgoing to give it a minute to see
if I have some questions, I knowit's pretty thorough here, but,
uh, any questions you have onincome, on visas, credit.
(27:30):
Anything like that.
This is your moment.
I know that I see a lot of timeseveryone, when they're, you
know, running the quotes for thefour nationals, they're
automatically putting in like700 as the score.
And all I can stress, I can'tstress it, uh, is know that what
score you put in there is goingto affect the options that you
(27:55):
get.
So do, uh, if you have anydoubt, reach out.
And, and we'll confirm to youfor the different investors
what's the score you have toput, but we do have that
guidance also in the KnowledgeCenter where we let you know for
X, Y, Z, uh, for nationaloption, you have to put at least
(28:16):
either a 500 or a 680 or a 700or the program minimum as the
credit score to get foreignnational options.
Alright, I don't see anyquestions.
Give it another minute and nowwe'll be done for today.
Uh, just letting you all knowthat starting next week, we're
only going to be having thisparticular training on
(28:41):
Thursdays.
Same time, 12 noon, but we arenot going to have it on Tuesday,
Wednesday, and Thursdaysanymore.
We're just going to have thistraining on Thursdays because
we're going to have someadditional, uh, team wide
training.
Now on Fridays, which is goingto be awesome.
So, uh, looking forward to thatstarting next Friday.
(29:03):
All right.
So no questions.
I hope that's because I did sucha great job and not because I
put you out of sleep.
Uh, looking forward to seeingyou all next Thursday and seeing
you all on next Friday.
So have a good day.
Okay.
So I was just touching base onthat right now.
What exactly is a foreignnational borrower?
A foreign national.
A foreign national is a citizenof another country who derives
their income and permanentlyresides in a country.
outside the United States.
Now, since we do have so manyloan options at the mortgage
(00:23):
calculator, we do have anexception that's possible when
we have a dual citizen, right?
Citizen of the United States andcitizen of another country who
lives permanently outside theUnited States and basically has
created their whole life outsidethe United States.
Um, good example for this couldbe someone who was born.
(00:47):
In the U S so they have their usbased citizenship physically
born here, but they've livedtheir whole life in another
country.
And they're also a citizen ofthat country.
That's where they work.
That's where they have theirbusiness.
That's where they have theircredit.
That's where they have theirassets.
That would be a foreignnational.
And we do have an option fordual citizens that, uh,
(01:09):
basically that are foreignnationals.
Uh, now please do note, uh,there is not a credit score
requirement, nor is U.
S.
based credit required forforeign national borrowers.
Uh, we, when we, you're pricingthese out through the pricing
(01:30):
engine, uh, please do be awarethat you have to input a certain
credit score For the differentconduits that we have, right?
So you're either going to put ina 500 as the credit score to get
options from, let's say investora, B or C, and then you would
(01:52):
put a six 80 credit score to getoptions from most of the other
investors that offer fornational loans.
Um, that is simply a hack, uh,that has been set up.
By the different, uh, investorsthat we have available, uh, that
we can offer the foreignnational products, uh, to,
(02:15):
because, you know, they don'ttypically do not have a credit
score, right?
So some.
Say put 500 to get theiroptions.
Others say put 680 to get theiroptions.
See what different options youget, check the guidelines, and
then see which is the best onefor your borrower.
Now, please do note if theforeign national borrower does
(02:38):
have a credit score, then youneed to abide by the minimum
credit score and trade linerequirements for the program
guidelines, which that willapply, right?
So.
They don't have a credit.
No minimum credit is required.
But if they do have a creditscore, then you have to look at
the minimum credit scorerequirements and make sure that
(03:01):
the borrower meets thoseminimums.
Now, please do know, um, we dohave foreign national borrowers
that are from visa waivercountries, as well as foreign
national borrowers that are fromnon visa waiver countries.
What exactly does that mean?
(03:23):
And how does that affect yourborrower?
And how does that affect theloan and you, right?
Well, it has a lot to do withit.
A visa waiver country.
is a country where a, uh,foreign national does not need a
visa, a valid, unexpired visa.
They do not need it to enter theUnited States.
(03:46):
Uh, the most common example forthis would be, uh, foreign
national borrowers that arecitizens and hold a European
Union passport, for example.
Those are visa waiver countriestypically.
And borrowers, for example, thathold a Canadian passport.
That's another visa waivercountry.
(04:08):
These borrowers do not need avalid unexpired visa stamped on
their passport to gain, youknow, to be able to enter the U
S.
Which means that they would nothave to provide that in order to
be able to qualify for the loan.
Now, we do have options thatdon't require them to have a
(04:31):
visa.
If it's an investment propertyand they're not going to sign
here in the United States, then,um, you're not going to have the
requirement.
But for example, borrower from,let's say most South American,
Central American country, let'ssay Colombia.
Right.
That's one of the most popularsegments now for national
(04:52):
buyers, borrowers looking topurchase and will need financing
in the U.
S., but they need a visa.
They don't have a visa, theycan't come, they can't enter the
U.
S.
Most want to view the propertiesor at least if they need to come
sign in person, they're going toneed that visa.
And most options will require,if you're going to have an in
(05:12):
person signing, or if it's beingbrought as a second home,
they're going to require a visafor a non visa waiver country
individual.
So do be aware of that whenyou're interviewing your foreign
national borrowers, you're goingto ask where they're from,
you're going to see if that's avisa waiver or non visa waiver
country, you're going to askthem if they have a passport
(05:32):
that's valid, and you're goingto ask them if they have.
a visa if they are from a nonvisa waiver country.
Don't ask them if they have avisa if they are from like
Canada or European Union.
So make sure you do yourresearch.
Don't put the borrower on a wildgoose chase.
Uh, you always gotta, you know,show your knowledge.
Now do be aware that, uh, notall visa types are acceptable.
(05:57):
So do check the guidelines forthe option that you're choosing.
Reconcile that with the visatype that your borrower has if
they are required to have a visaand make sure that it's an
acceptable visa type.
For example, one visa type thatis not acceptable is the
diplomatic immunity visa.
(06:18):
Reason being you can't sue anyborrower that has a diplomatic
immunity visa.
So how would a bank sue them forto collect right for foreclosure
proceedings?
Um, And like I was stating, wedo have an option for expired
visa for a borrower that's froma non visa waiver country where
they have an expired visa.
(06:39):
If it's an investment propertyloan, um, When the borrower is
not signing in the U.
S.
invest in property because ofits second home.
At some point, they got to visitthe country to live here and
conform with the requirements ofthe mortgage that says second
home.
You got to occupy the property Xnumber of days or weeks or
(07:00):
months, depending on theguidelines per year.
So they definitely need a visafor that option.
But they may not need a visa forinvestment property if they're
not going to sign here in the U.
S.
if we take it through what Icall our streamlined option to
cover shortly.
So keep that in mind becausethat's a definite, uh, hold back
for some people that don't mindviewing the property by video
(07:24):
with their realtor, right?
Do a virtual showing, uh, butmaybe we're not offered the
option to close on the loan.
Without having a valid visa.
We do have that option here atthe mortgage calculator.
So what are the eligibletransactions for a foreign
(07:45):
national?
Well, We have our full docoption, right?
And I'll cover what full docmeans in a, in the next slide,
but we have our full doc option,which can be either as a second
home.
Now, remember second homes haveno pre payment penalties.
So you're probably going to havea little bit higher interest
(08:05):
rate on second home loans thanyou would on an investment
property, which could have.
You know, 1, 2, 3, 4, 5 yearprepayment penalty, which is
going to help the rate and theinvestment option would also be
the one for the, uh, no visasituation.
And full doc, we also have astreamlined option, right?
(08:29):
We have a streamlined option forfull doc and a streamlined
option for DSCR.
What exactly do I mean by astreamlined option?
Well, I'm talking about whenit's full doc, an option that
does not require creditreference letters from the
borrower.
(08:49):
So you want minimaldocumentation.
Borrower says, Hey, I'm notgoing to be able to get those
letters anytime soon.
You know, um, then we do havethe streamlined option that will
not require credit verificationletters for full doc.
And we also have the streamlinedoption for DSCR, which is our
other eligible transaction type.
(09:11):
Uh, the streamlined DSCR optionis not going to ask for a CPA
verification letter, uh, thisCPA verification letter would
not be when they ask for it.
It is not for income purposes,but to verify housing expense in
their country of origin, if theyhave a housing expense, if they
(09:32):
have a mortgage, you know whatthe taxes may be, those kinds
of, uh, those kinds of, um,Verifications are required in
most cases.
Not required in our streamlinedoption and in our streamlined
DSCR option.
Not only will we not ask for aCPA verification letter for
housing, uh, but we will not askfor a credit reference letter.
(09:57):
Also, so we could do this onethrough our no visa required
option.
Then we do have a quote unquote,and I guess we call it a non
streamline option for the DSCR,which is, again, DSCR qualifies
you on the rental incomegenerated by the public.
For the property, but in thiscase, the non streamline option
will require a CPA letter toverify the housing situation in
(10:21):
their country of origin, andthere will be a visa requirement
kind of have to have active visaon their unexpired passport.
So unexpired visa on theirunexpired passport.
So.
Uh, now as far as, uh,verification of income for the
(10:42):
full doc, I'm going to get thatin the next page when I show you
the sample letters.
But remember DSCR, you're notgoing to use any personal income
from the borrower.
And one of the things to know onthe full doc investment property
loans, keep in mind that in manycases, the guidelines will not
(11:02):
allow any income to be used fromthe subject property.
Typically on those full docinvestment loans for foreign
nationals, you're qualifyingthem on their income in their
country.
And again, that full doc couldbe an employee or it could be
self employed employee, you'regoing to get a verification
(11:26):
letter from their employer,similar to a verification of
employment, but it's going to bea sample letter with an um, you
know, like a.
Just a letter, which I'm goingto show you shortly, or if it's,
uh, if they're self employed,the full doc is going to be a
letter from their accountant.
Could be a CPA, tax preparer,uh, you know, or accountant,
(11:46):
but, you know, but in theircountry, uh, they're going to
have to have a license, right?
So we'll need some kind of alicense verification document,
uh, for, for the accountant, aswell as the verification letter
for income when they're selfemployed.
Again.
An employee is going to be averification letter from the
employer.
(12:08):
So let's get into the closing,right?
We'll talk about the sampleletters next, but let's talk
about the closing because in aforeign national loan, this is
just as important as do theyqualify as how are they going to
sign?
How are they going to close?
Remember they're In some cases,thousands and thousands and
(12:32):
different time zones away.
They need to make sure they canget a, if they're going to come
to the U.
S., they can get a plane fare orthey have to set the
appointment.
So, uh, at the embassy orconsulate.
So the closing should be plannedat the onset of the loan
application.
When you're talking about.
Do you qualify?
(12:53):
You're also going to ask, areyou going to come to the United
States to sign in person?
Do you already have a visa?
If you're going to come here, ifthey happen to be from a non
visa waiver country, um, are yougoing to sign in your country of
origin where you live?
Because then they, they need tomake appointments.
So you want to, Plan this at theonset of the loan application,
(13:13):
but at least two weeks beforethe closing is to occur, right?
Give yourself time.
So how, what are the differentways I'll break it down a little
bit more detailed here.
What are the different ways thata foreign national borrower.
Can sign.
Well, the easiest, most commonway is the signing can be in
(13:37):
person in the United States.
Right?
So with that being said, youknow, we're going to have to
have a lot of communicationgoing on between you and the
borrower, including the clear toclose and all that kind of
stuff.
You need to give them a lot ofadvanced warnings so they can
get that ticket, a plane ticket,and they can be here for the, a
lot of time that they need to behere.
(13:57):
To be able to do theirwalkthrough inspection,
hopefully of the property andthen to be able to sign.
So, you know, we sometimes getdelays.
It's hard to, it's hard to meetthe mark exactly on that day.
So we do want to make sure thatthe communication channel is
open.
Two way communication and thatwe set the expectations properly
(14:19):
and we update the borrower, uh,as soon as possible with any
changes in case they need tomake some changes to airfare,
air flight, you know, all thatkind of good stuff.
Because sometimes it's tough toget those tickets.
And making changes could costthem thousands of dollars in the
cost of the airfare or possiblylosing non refundable tickets
(14:39):
and having to purchase new ones.
And then you're going to have avery irate borrower that's going
to be asking you possibly forreimbursement of the extra fees.
So please do communicate verywell with them, uh, especially
if it's, you know, for any ofthese reasons, right?
So first option, the in person,remember visa will be required
if the borrower resides in nonvisa waiver country.
(15:00):
So you don't want it at the lastminute.
That to become an issue.
Like my visa is expiring nextweek.
So I got to close today and Igot to leave today.
So very important.
The next way that they can signis.
at a U.
S.
consulate or U.
S.
embassy outside the U.
S.
A., right?
This, again, another logisticalsituation where good
(15:22):
communication needs to be, uh,in, you know, in order because
the borrower needs to make anappoint, the appointment in
advance at this consulate orembassy, and sometimes it needs
to be months In advance, right?
Months.
You can't say like, Oh, we'reclosing next week.
Okay.
Let me make the appointment.
(15:43):
Then all of a sudden they,they'll tell you, no, I'm sorry.
They, the appointment is not forthree weeks and I got to fly 800
miles.
To the Capitol, which is theonly place where they may have a
U.
S.
embassy or consulate in aforeign country.
So do be aware of the importanceagain, communication, setting
expectations because they needto make an appointment.
(16:05):
So they may want to make thatappointment and then let you
know when it is.
And now you've got to set targetthat if you don't meet, you got
to let them know like two weeksbefore, Hey, you know, we've had
a delay in the appraisal.
I don't think we're going tomeet that day.
I think you should reset theappointment for a week later.
Can't let him know that two,three, four days before he's
(16:26):
going to close.
Hey, we got a, we got a threeday delay because of whatever
this is.
This is probably the toughestpart of the foreign national
loans is the logistics to pindown the closing date and the
borrower being available to signon that date.
Now, another solution, uh, whichis a little bit more difficult
(16:47):
for foreign nationals becauseJust due to the nature of their
being a foreign, they being aforeign national, they do not
have us based credit.
I mean, excuse me, us basedidentification.
So it becomes difficult to doremote online notarization
because remote onlinenotarization relies heavily on
being able to verify theborrower's identification
(17:11):
through third party systems,right?
And in remote, onlinenotarization.
We have the remote notary in onelocation.
We have the borrower signing inanother location and the
borrower is basically sharingtheir information with the
remote notary who say, yeah,that's you.
(17:34):
And they're going to be givingcertain notarized documents,
verifying the validity of thesignature of the borrower on
those documents.
So it's, it's a, it's a, it's aprocess.
Not always approved.
So you need to make sure that ifyou plan to use remote online
(17:54):
notarization, coordinate that atthe onset of the application, as
soon as possible to confirm thedetails.
You want to make sure that theinvestor or lender funding, the
loan, the investor, we'reselling the loan to, or if
you're going wholesale, thelender that's funding the loan,
you need to make sure that theyapprove and accept it.
Remote online notarization.
(18:15):
So whoever you're using for theremote online notarization needs
to be submitted for theirapproval.
And then most importantly, thetitle company needs to approve
the remote online notarizationprocess because many title
company underwriters, for thereason that it's hard to do
(18:35):
third party verification of theidentification of a foreign
national.
Most title company underwriterswill not.
Approve and accept remote onlinenotarization.
So you may think you're cool.
You're great because, Hey, it'sawesome.
And, uh, we're going to close,uh, because I found, uh, uh, a
(18:56):
remote online notary and theinvestor accepts it, but then
you forget to check with thetitle company.
And then when title says, okay,I mean, uh, how are these docs
signed?
And maybe you didn't even tellthe title company.
They sent the docs to the barthinking they were going to sign
somewhere that was approved.
You know, like at a consulate orembassy and all of a sudden they
get a package back signed byIran, remote online notary, or
(19:19):
approved by remote onlinenotary, and they're like, wait a
minute, we didn't approve this.
This is an invalid closing.
This has to be done all overagain, and you know, that's a
logistical nightmare.
You know, which could delay yourdeal a week or two weeks, so
imagine going to the seller andsaying, we really didn't close,
we need a week or two weeksmore.
That's going to be apredicament.
(19:41):
And the last option that couldbe used for signing is the, is,
uh, apostille notarization,right?
Apostille is a certificate thatcertifies the signature of a
public official on a documentfor use in another country.
(20:01):
So borrower could go to thepublic official.
Cool.
In the foreign country.
And if that public official canproduce an APA steel to certify
the signature and all thosedocuments, it's actually being
the borrower.
And if the APA steel quoteunquote, notarization is
accepted by the title companyand is accepted by the investor
(20:23):
or the lender, then you coulduse it.
But notice what I'm, what I'mmentioning is that they have to
approve the process just likethey have to approve the remote
online notarization.
process.
So definitely in person orconsulate embassy is the
preferred route.
We do have the other two routesas potential options, but the
(20:44):
main point is, uh, make surethat you coordinate this at the
very beginning of thetransaction.
And, uh, Oh, I got my clear toclose.
Let's get everybody ready toclose.
You're setting appointments andyou haven't realized the
logistical situation of tryingto get a foreign national
borrower to close.
And now you're in a pickletrying to figure out how you're
(21:05):
going to close this deal andfund it.
Oh, and on top of that, I didn'tmention, right.
Your rate lock's going to expirein three days.
You're used to, yeah, they'regoing to sign tomorrow.
I have my package tomorrow, theday after.
Nope.
If that package got emailed ornot emailed, got sent to that
borrower and they're in Franceand they're signing in France,
that package now needs to getcouriered, you know, we're going
(21:27):
to ask them to scan it obviouslyand email it for review, the
signature docs at least so thattitle company could say, yep,
you signed everything properly.
Now you can send us the packageor they may say, Hey, you missed
this and this and this, you gotto go back because you missed
something.
So now they got to go back anddo the appointment again and all
that kind of stuff.
And then once everything isproperly signed and confirms
(21:50):
probably signed, then they'regoing to send back by curve.
We are usually DHL, which is apopular one for overseas.
They're going to send back thepackage by DHL and it's not
overnight.
Even though they may sayovernight, it's going to be like
three days for it to get to thetitle company bar.
I need to go drop it off.
Who knows what time to drop itoff.
So, then it needs to get here tothe US.
Then, it needs to getdistributed by from the airport
(22:12):
eventually to where it's goingto go to the title company and
then once the title company hasit, then they upload the package
to the portal of the investorand now possibly, you know, the
clock stops ticking on that ratelock So, I could be a week or
more just trying to get thatwhole thing finalized.
Get that closing finalized andyour rate lock has to be good
(22:34):
throughout that whole time.
So a lot of moving pieces to theforeign national borrower that
has nothing to do with theircredit or income or appraisal or
title has to do with justclosing the deal because of the
logistics involved in all ofthese different components of
the transaction.
(22:54):
So plan the closing.
So last but not least, let'slook at some of the documents
that we're going to need, right?
I'm sharing with you here asample income letter for a self
employed borrower right now.
This was from one of ourinvestors that has good for
national resources.
They give a sample letters thatwe can provide.
(23:16):
Um, to the accountant where theycan then put it on their
letterhead and add anything elsethat they feel, but it's
basically fill in the blank withthe main information that we
need, right?
The date, borrower's name,passport number, the company
that they own, since when theyowned it, their percentage of
ownership in the company, whatthe main business of the company
(23:37):
is, if they have a website.
And the income for the borrowerfor the last two years, the
2022, for example, is two yearsprior, 2023, one year prior in
the year to date income for2024.
And then they provide that ontheir letterhead.
We get their CPA or theiraccountant license information.
(23:57):
Hopefully they can actuallyprovide a certificate because
it's pretty tough for us toverify a foreign national
license.
So if they give us a businesslicense already, that's, that's
the best.
And then most importantly, ifthe document is not in English,
which we prefer them to comeinto English to expedite, then
it needs to be translated.
Uh, to English by a certifiedtranslator.
(24:19):
You can't just get it yourselfbecause you know English and
Spanish and translate it has tobe a certified translator.
That's going to put your seal onit, verifying the authenticity
of the translation, veryimportant because all docs need
to be in English.
So this is our sample letter.
When the borrower is selfemployed, I guess our sample CPA
(24:40):
letter, then here's our sampleletter for an employee.
Very similar to the CPA letter,but this is for an employee,
right?
Hourly salary.
We don't need tax returnsthrough the, uh, you know, most
of our options for these selfemployed borrowers.
We just need this letter.
We don't even really need paystubs.
We just need this letter.
So very simple to whom I mayconcern.
(25:03):
To inform that borrower X withID number Y has been employed
with company Z since, andthere's a higher date, what
their position is, their 2022income, 2023 income, what their
monthly salary or monthly incomeis.
And their year to date incomeand the, and if the
(25:24):
probabilities, uh, theprobability of continued
employment is good, right?
Like John Smith, his probabilityof continued employment is very
good.
He, she valued employeesincerely, same thing, uh,
needs, and this is for, from anemployer outside the U S
remember no inside the U Sincome can be used, needs to be
on company letterhead andtranslated to English, even any
(25:47):
other language.
And then last but not least.
They like to call it a bankreference letter, but this can
actually be used as a creditreference letter.
Now, do remember the following.
If we're going with one of ourstreamlined Apple doc or DSCR
(26:07):
or, or, or, or, you know, fulldoc investment, uh, which is
also available streamline this,uh, you know, we don't need any
credit reference.
So this letter would not beapplicable.
Very simple, letter conformsthat the borrower with a
passport number, uh, XYZ hasbeen banking with the bank name
(26:27):
since what date, their name, thechecking account number, what
the balance is, and that, youknow, they have fulfilled all
the obligations and that theyvalue the business relationship
that they have with them.
Very basic fill in the blankkind of stuff again.
This is used for creditreferences, needs to be in
English or translated to Englishby a certified translator, needs
(26:47):
to be on their letterheadreflecting their phone number
address.
And again, as a reminder, thiswon't be needed if you're using
one of our streamlined options.
All right.
So covered a lot of, uh,information here with you today
and wanted to know anyquestions, uh, for nationals,
(27:08):
great loan, very fast growingsegment of the market, along
with it and, and obviously DSCRand bank statement loans.
So it has to be, you know, I'mgoing to give it a minute to see
if I have some questions, I knowit's pretty thorough here, but,
uh, any questions you have onincome, on visas, credit.
(27:30):
Anything like that.
This is your moment.
I know that I see a lot of timeseveryone, when they're, you
know, running the quotes for thefour nationals, they're
automatically putting in like700 as the score.
And all I can stress, I can'tstress it, uh, is know that what
score you put in there is goingto affect the options that you
(27:55):
get.
So do, uh, if you have anydoubt, reach out.
And, and we'll confirm to youfor the different investors
what's the score you have toput, but we do have that
guidance also in the KnowledgeCenter where we let you know for
X, Y, Z, uh, for nationaloption, you have to put at least
(28:16):
either a 500 or a 680 or a 700or the program minimum as the
credit score to get foreignnational options.
Alright, I don't see anyquestions.
Give it another minute and nowwe'll be done for today.
Uh, just letting you all knowthat starting next week, we're
only going to be having thisparticular training on
(28:41):
Thursdays.
Same time, 12 noon, but we arenot going to have it on Tuesday,
Wednesday, and Thursdaysanymore.
We're just going to have thistraining on Thursdays because
we're going to have someadditional, uh, team wide
training.
Now on Fridays, which is goingto be awesome.
So, uh, looking forward to thatstarting next Friday.
(29:03):
All right.
So no questions.
I hope that's because I did sucha great job and not because I
put you out of sleep.
Uh, looking forward to seeingyou all next Thursday and seeing
you all on next Friday.
So have a good day.
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