Regulators push 20% down payments on mortgages

[South FLA]

I just self financed a gentleman that had an excellent credit score and he had 20% down on a second vacation home. The place appraised for 310K I sold it to him for 285k. Long story short he could not get approval ANYWHERE with 20% as a secondary home and did not have anymore money, so I ended up financing for 5 years at 6.25% adjustable after 5. Point is that if even people with excellent credit cannot get financing the housing market will be awash in inventory and housing needs to come down even more. This is was in Florida of course, not sure about California and other states. How is it on the left coast Redline?

Well if he is left broke after the 20% down he doesnt need to be buying that 2nd home then. Sound like the bank did the correct thing. We dont know how much he owes on the 1st house payment per month, his income, if he has other dept but the bank must and made the call. Just from the highlighted statement have to agree with bank.

Last score of mine I checked was 830 I could put %30 on a 300K house but the monthly payment and property taxes for another house would bankrupt me.

Prop taxes on 300K here is $9000/y

Best case scenario for me would be that he makes all his payments and then defaults at the end of the 4th year, that way I get the house back and can resell it. 

[SirSnookalot]

Best case scenario for me would be that he makes all his payments and then defaults at the end of the 4th year, that way I get the house back and can resell it.

Absolutely !  My ex partner back in Michigan has been doing this.  Either he makes money in the shorter term on the loan or he makes more money in the long term by acquiring homes.

My son in law here in Fla is in the mortgage biz, has been telling me of this scenario of good credit people, with cash d/p that have had trouble in qualifying.

[Nice_Bass]

I just self financed a gentleman that had an excellent credit score and he had 20% down on a second vacation home. The place appraised for 310K I sold it to him for 285k. Long story short he could not get approval ANYWHERE with 20% as a secondary home and did not have anymore money, so I ended up financing for 5 years at 6.25% adjustable after 5. Point is that if even people with excellent credit cannot get financing the housing market will be awash in inventory and housing needs to come down even more. This is was in Florida of course, not sure about California and other states. How is it on the left coast Redline?

Well if he is left broke after the 20% down he doesnt need to be buying that 2nd home then. Sound like the bank did the correct thing. We dont know how much he owes on the 1st house payment per month, his income, if he has other dept but the bank must and made the call. Just from the highlighted statement have to agree with bank.

Monthly payment for his other house is on credit report, income is always verified.  debt to income ratios are a different denial factor than equity down requirements.

Essentially you need to have proper equity down plus six months reserves on PITI for your primary residence as well as the propsed second home.  If you don't have that extra cash after the DP, then that would lead to a denied loan.