Lender for Non-Comforming, Non-Saleable Mortgage Loan?

[Mister Imperceptible]

I was looking to extract from my rental property what equity I can before asset values tank and liquidity dries up.

I talked to my original mortgage broker, and also someone my original mortgage broker recommended. They both stonewalled me.

Talked to Quicken Loans, they do not offer such loans unless I am using the proceeds to put back into another bubble-inflated property.

Talked to Wells Fargo, who my original loan was sold to. They only offer 60% LTV and a 7.8% variable rate. They didn’t even offer lube for my asshole to go with it.

Talked to my local credit union, they are unable to help. However, the commercial lending officer told me that because I have been receiving a 1099 for 3 years, a loan cannot be made by most institutions because I don’t have (the illusion of) security, any loan made to me would be non-conforming and non-saleable. I need to find a lender who wishes to offer a PORTFOLIO MORTGAGE, a loan they are willing to hold themselves and not sell because it is non-conforming.

I would think someone who grosses $15k a month would be capable of the discipline not to spend all disposable income on cocaine and hookers, but apparently there is little to no credit given for being able to put steaks the freezer and handle asset-liability management.

Does anyone know of a lender who offers such loans for the most credit-worthy borrower and is willing to hold such a loan in their portfolio?

[7Wannabe5]

Sell it on land contract?

[Jean]

Someone who doesn't expect to need any liquidity in a close future ?

[Dream of Freedom]

Did you explain it to them like you explained it to us? If you did, at best they are thinking "He is expecting a crash so he wants to leverage up? What?". A more cynical person would think "If a crash happens he will leave the property to the bank. And why not he has his money out?"

[Mister Imperceptible]

I have managed to find two brokers to work with me and I will now have them compete with each other.

After the commercial lending officer at the credit union said no to cash-out re-finance, I outright asked for a $250k unsecured loan for the purpose of investing in crisis alpha. I told him the only threat to my earning a continued $200ish thousand income per year was a crisis. So I had 2 uncorrelated sources of return: 1) Mr. I crushes Corporate America for $15k+ per month, and 2) Mr. I generates massive crisis alpha. It is an all-encompassing pairs trade. Either way, servicing the debt is assured. He said the only people who get $250k unsecured loans are those with 20 million dollar net worths. I still asked if I could take the mugs with me.

Also, this:

https://www.resetera.com/threads/wapo-f ... es.144787/

[Seppia]

I’m genuinely curious as to why you just don’t sell the asset instead.
Care to elaborate a bit?
Thanks

[Mister Imperceptible]

I am not so much short the asset in the long run as I am in the short run, meaning the time is now when the house value is at an intermediate high and rates are low that the equity should be extracted to invest elsewhere. The rental property may suffer in the short term in terms of price but it is in a second-tier metropolis (not NYC, Boston, LA, SF, Miami, etc.) and therefore it is less advantageous to exit the position entirely, particularly when the primary source of real estate returns is not price appreciation, but rental income. See:

viewtopic.php?f=3&t=9597&p=189989&hilit ... ng#p159296

This is also keeping in mind Ben Graham’s philosophy of not leaving the risk-on part of the market even when it is perceived that the risk-on market is overvalued, IOW, when stocks are overvalued position yourself 25% stocks and 75% bonds, and when stocks are undervalued position yourself 75% stocks and 25% bonds, or maybe somewhere in between but never 100% either way, because your calculations may be wrong. Bearing in mind position sizing.

Additionally, it may be possible that the trade can win in all directions:

-Stocks crash, corporate bonds default, central banks are forced to provide unprecedented liquidity.
-Main Street balks at another Wall Street bailout, demands QE for the people, IOW Universal Basic Income or some derivation. This causes not only an inflation in consumer goods but also a rapid depreciation of faith in the USD, both at home and abroad. Gold and gold stocks soar. QE for the people supports real estate prices.
-None of the above factors in geopolitical risks such as the trade war or other exogenous shocks such as more drone strikes on oil facilities that causes oil prices to skyrocket.
-Everything above happens, and Mr I remains employed because he works in biotech and Baby Boomers will do anything to stay alive and will continue to direct public policy toward funding health care services and biopharmaceutical manufacturing/research and development.

For more on using real estate (risk-on) and gold (risk-off) as complimentary instruments to short the USD, see:

viewtopic.php?f=3&t=10085

[Seppia]

Thanks MI