The purpose of this article is to encourage investors to continue to make these loans, in spite of the rumors that exist surrounding them.
I will start off this article the same as the beginning of Part 1, by saying that I will always offer loans to homeowners that are owner occupants. It is an important segment of lending and a heck of a niche for my office. I will say that the feds have brought about a lot of regulatory protections for this class of Borrower, but that is simply because they have determined home ownership to be such an important right and should be protected. It’s kind of like car seats for kids, seat belts, speed limits, food labels, movie ratings, warning labels on medications, etc., etc.
I will also tell you that there has not been a foreclosure of an owner occupied loan originated by my office (that I am aware of) in the last 6 years. This is key.
There are really just 2 quasi-objectionable regulations that apply to owner occupied transactions.
So, statistically, owner occupied loans don’t get foreclosed upon in any significant number (zero in my office), Borrowers do not rescind the loans in any significant numbers (I cannot find any mention of it on line), the loan to values are good, they have an ability to repay the loan, they have an exit strategy, they pay the property taxes and insurance monthly, they do a consumer credit counseling class and the properties will likely appreciate in the coming months and years.
So if you hear mention of avoiding these loans, show whomever has said it these articles. These loans are important and a very good investment.