As a broker, the feeling is too familiar. You see the appraisal or credit score and your heart sinks. You think the deal is dead. But behind every file, there are real people with real stories of how they got into the situation they’re in.
As alternative lenders, we need to hear these stories. Things are not always as they seem.
If the Credit Score is low, find out why. Are there errors in the credit report? Are the issues chronic, or was it a one-time event that caused the problem? Are payments typically made on time, and if not was it just related to how the borrower gets paid (occasional lump sums vs regular salary)? Does it relate to payments on a personal guarantee of someone else’s debt?
If the property shows evidence of being a grow-op, find out who was doing the growing. We can often finance the purchaser of a property that had been used as a grow-op. If it was remediated, get copies of the permits and certificates showing that all of the required work was completed.
If the pictures in the appraisal suggest a hoard, get the back story. Is the borrower getting the help they need? What is the LTV – if it is low enough, less weight may be given to the condition of the home. Will a new mortgage actually help the borrower or will it just be postponing the inevitable?
The team at Kokanee Mortgage is always looking to find creative ways get the deal closed in the face of obstacles. If you have a deal with unique challenges, call us for help.