http://www.TwinCitiesUSA.com/video/Jill-Meents-of-Bell-Mortgage-discusses-Portfolio-Loans

STEVE:  Hi, this is Steve Westmark.  Thanks for watching my blog once again this week.  Today, I’m bringing in a specialist in the area of mortgages, Jill Meents from Bell Mortgage, and so welcome, Jill.

JILL:  Thank you, Steve.  Glad to be here.

STEVE:  In this interesting market, many of you have heard the terms Freddie Mac, Ginne Mae, and Fannie Mae, but all of those you happen to have to qualify for mortgages in a different way that are going to be sold in the secondary market.  Today, what I wanted Jill to talk about is what’s called portfolio mortgages.  So Jill, what’s the difference between these government-type mortgages and what you can do with portfolio mortgages and how does that fit in helping people buy homes?

JILL:  You know, Steve, you’re correct.  Fannie Mae, and Freddie Mac, and Ginnie Mae are large loan servicers and they dictate how we underwrite a file.  So the good news about that is we get great pricing and great product through those investors.  But lots of times, we’ll find a special kind of file whereby we have a self-employed file where the borrower is maybe recently self-employed or has a great accountant and isn’t showing much cash on his tax return or maybe we have a unique property where were can’t find comp properties and we’re having some challenges there. 

So we put together a program at Bell whereby we keep the loan in our portfolio and we service it.  Thus the name portfolio lending.  So we can really work outside the box in a lot of underwriting guidelines and a lot of appraisal types and also we can look at kind of some unique credit.  So it’s a great product that we keep in our portfolio.  Thus the name portfolio lending.

STEVE:  So I assume with this, Jill, there may be differences in down payments because like on FHA you can get in with 3% down, but a portfolio product is probably not that.  And are interest rates any different on that or how do they work their product?

JILL:  Well, you’re correct, Steve, in that we have to have at least 20% down.  If we have less down payment, then we need either FHA insurance or private mortgage insurance.  And that’s something that we’re trying to alleviate.  So as long as we can get 20% down and we can do it either with a first mortgage at 80% loan to value or maybe we do a first mortgage up to 90% loan to value and we have a second mortgage step in and pick up the difference.

So there’s different ways of financing them, but yes, they’re considered more risky lending and yes, the lender wants a bit more down payment.

STEVE:  Well, I also know you have a newer product that’s just coming out that has to do with rehabs.  What’s going on there?

JILL:  You know, we do.  We just came out with a great program.  It’s minimum down, so somebody can come in with 5% down on any kind of conventional loan.  And let’s say you have a listing, Steve, for $400,000.  It’s kind of tired.  It needs some remodeling, maybe a new kitchen, maybe a new bathroom, maybe new carpet, that kind of thing.  What we can do is we can take your sales price of 400, we can add the price of the improvements.  Let’s say they’re $50,000.  Get an appraisal for the 450 as if the work were complete. 

We can go ahead and close the loan, have them do the work, and within 30 days after the work is done, then we can do a re-inspection and sell the loan right into the secondary market.  Or we can keep it in our portfolio.  But it’s a great new product to help buyers with not much cash come in with a minimum down payment and be able to finance all their remodeling costs.  It’s just super.  So maybe it could help move some of those tired listings.

STEVE:  Well, thanks for coming in today, Jill, and what’s the best way for them to get a hold of you?

JILL:  Probably my cell phone, Steve, which is 612-867-1979, and thanks for having me onboard.