Subject: Trade Equity - tip of the day
Good Morning,
Today is Monday, January 23, 2012
All wholesale staff is available
Turn times are currently same day!
If the loan is received by 11AM, an UW decision will
Be issued before end of business the same day.
Tip of the day- Trade Equity
Trade equity is an
acceptable source of funds to supplement the borrower’s minimum borrower
contribution provided the following requirements are met:
|
• |
The seller’s equity
contribution for the traded property must be a true-value consideration
supported by a current appraisal. |
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• |
The borrower must
make the minimum required contribution from his or her own funds unless:
|
These requirements
apply to all transactions that involve property trades, including those that
are evidenced by two separate contracts that have the buyer and the seller on
one contract reversing roles on the second contract.
Calculating the
Equity Contribution
The equity
contribution is determined by subtracting the outstanding mortgage balance of
the property being traded, plus any transfer costs, from the lesser of either
the property’s appraised value or the trade-in value agreed to by both parties.
For trade equity
requirements for manufactured housing, see Section B5-2.3, Manufactured Housing.
Documentation
Requirements
For real property,
the transfer deed must be recorded.
In addition, lenders
must obtain the following:
|
• |
A search of the
land records to verify the ownership of the property and to determine whether
there are any existing liens on the property. |
|
• |
Proof of title
transfer and satisfaction of any existing mortgage liens for which the
borrower was liable. |
Thank
You!
Neil
Johnson
Gateway
Mortgage Group
National
TPO Operations Manager
4201
N. State Hwy 161
Irving,
TX 75038
Office:
972-908-3390 ext. 118
fax#
918-858-8392