Are You Using The Right Lender? Home Sellers Freak Out

SPEAKER_1 (0:00)

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Michael Zuber (0:30)

All righty, folks, we are about to see the business at Velocity Mortgage explode. We've got conventional loans over 7 percent, investor loans over 7.5 in the normal market. But you know what? Velocity Mortgage is a make sense lender, and they don't move overnight like all of these other players. We're going to talk to Stephen about the 50-40-10, the no ratio, all this other amazing stuff because I think his lending practices about to explode. But before we do that, we need that marketing spiel so neither of us is in trouble.

Stephen (1:00)

Thank you, sir. Again, although I've worked very happily for Velocity Mortgage Capital, all the ideas and topics discussed on this channel are that of my own, so let's get it going.

Michael Zuber (1:08)

Yeah, so let's step into this first. Again, this might be the first time people are seeing this or they're seeing it, but didn't really get it. When I say Velocity is a make sense lender, what does that mean?

Stephen (1:18)

Well, I mean, when certain metrics are measured and you have certain metrics received, whether it be FICO score, right? Maybe experience level.

Michael Zuber (1:34)

Aggressive tax returns.

Stephen (1:37)

Correct. You know, things of that nature that typically would disqualify you with other lenders, we're able to look at, you know, kind of outside the box a little bit, whereas like, even if I don't verify your capacity to pay back the loan, all the other metrics that I actually focus on, tells the story by itself. You didn't get great credit out of nowhere. You know, your tax returns show you make no money, but how do you have a million dollars in the bank?

Michael Zuber (2:00)

Yeah.

Stephen (2:00)

How do you own 12 multifamilies? You know what I mean? How's that? I'm doing the third one now, right? How is that, you know, so, yeah, again, verifying the capacity doesn't guarantee the loan's going to get paid back. But the other metrics, you got 25% skin in the game. You've never been laid on anything in your life as far as your credit profile for 20 years. You got a million dollars in the bank.

Michael Zuber (2:21)

I'm not too concerned.

Stephen (2:22)

Right. Well, specifically for that borrower, like I said, we did an exception for him where the multifamily is a 12 unit, but the DSCR normally supposed to be 1.20. It was 0.68.

Michael Zuber (2:34)

Oh, jeez.

Stephen (2:35)

On a $2.4 million deal.

And we still did it, right. But it was that 60% LTV, 740 FICO, million dollars in the bank after down payment. This is the third multifamily we're doing for the guy. He paid all the other loans on time. So we're like, this guy knows what he's doing. He just needs to get his hands on the property, and he does what he does. He probably slapped some lipstick on a pig, starts to renegotiate, increase rents. Now it's really cash flowing how it should be.

Michael Zuber (3:01)

Now it's at a 2, not a 0.60.

Stephen (3:03)

Whereas before, the previous owner didn't know what to do. So team up with the right borrower, with the right metrics that we can see, measure it. Like I said, it tells itself.

It makes sense to lend to something like that, because why wouldn't you?

Michael Zuber (3:16)

Yeah. So what I would tell people watching this is a lot of you haven't gone to a lender like Velocity, which I have. I've done personally multiple loans with them and multiple loans with Stephen for that matter. And most of you are used to something called approve eligible.

Stephen (3:31)

Right.

Michael Zuber (3:32)

And what you could think about is that's a box, right? Your mortgage broker is taking in a set of 20, 25, whatever it is, 30 things. They're putting it in a box. They're pushing a button. They're waiting 7 seconds. And they're getting approve eligible or not. That's what most of you are used to.

What you do with Velocity Mortgage is you bring them the deal. Yes, you give them your credit profile, things of that nature, nothing crazy, three, four, five things. But you also talk about the deal. And of course, you have skin in the game. We're not talking high leverage, right? We're not talking 99% loans here. That's that's not what we're talking about.