Loan Officer Training - 12/17/2024 - Mastering ITIN Borrower Loans

In this episode of Loan Officer Training, we dive deep into the world of ITIN Borrower Loans—a crucial yet often overlooked area in lending. Join us as we break down what ITIN loans are, who qualifies, and how you, as a loan officer, can confidently guide clients through the process. Discover key strategies, common challenges, and expert tips to help you expand your borrower base and serve a growing market effectively.

Whether you're new to ITIN loans or looking to sharpen your skills, this episode will give you the tools and insights to become a go-to expert. Don't miss out on this opportunity to level up your lending game! 🎧

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About The Mortgage Calculator:

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation! 

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages, P&L Mortgages, Asset Based Mortgage Programs, No Ratio CDFI Loan Programs, DSCR Investor Mortgages, Commercial Mortgages, Fix and Flip Mortgages and thousands more!

Our Mortgage Loan Originators are trained to be loan consultants to guide borrowers throughout the entire loan process. A licensed Loan Offi

Catch all the episodes of the Loan Officer Training Podcast at https://themortgagecalculator.com/Page/Loan-Officer-Training-Series-Podcast

Catch all the episodes of the Loan Officer Training Podcast at https://themortgagecalculator.com/Page/Loan-Officer-Training-Series-Podcast

Loan Officers for Unlimited Free Non-QM Leads & Trainings Join The Mortgage Calculator at https://themortgagecalculator.com/join

The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation!

Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!

Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access...

Transcript

Restream recording Dec 17, 2024 • 05:05:26 PM: 0:13

Now, first let's discuss what is an I 10 ITIN an i 10 is an individual taxpayer identification number. Please note that an I 10 is not a substitute for a social security card. An I 10 is only available to individuals with a foreign or alien status. Meaning you're not going to have an I 10 if you are a U. S. national or a U. S. permanent resident alien or citizen, right? I 10s are for, um foreign individuals only or individuals without status. The purpose of the I 10 is to help individuals comply with U. S. tax laws and submit income tax returns when required. An I 10 document does not authorize work in the U. S. The I 10 document is a 9 1 1 Digit number has a nine digit number beginning with number nine. Okay, let's go right on to the next one. Hold up a second, folks. Let me make sure that I check the microphones. Okay, we have our microphones are properly set. Let me just. Let's try to turn up the volume a little bit here. It is good for the rest of you. Okay, so what is an ITIN borrower? Okay, the ITIN borrower derives their income solely within the United States. They live full time in the U. S. Um, they need to abide by the program credit requirements. So they need to have U. S. Based credit. And like I mentioned, meet the program requirements. So let me try to meet myself and try to fix this folks because the issue I'm having is that this morning I am on hot spot as we have no Internet here where I'm at. So give me a second. Please let me know if, um, it's any better now for you all. Alright, thank you folks. So, uh, the ITIN borrower, uh, derives their income solely within the United States, right? Uh, that's what makes them an ITIN borrower. They do not have legal status, but they are in the U. S. and living in the U. S. And they have U. S. based credit. This is what differentiates the ITIN borrower from a foreign national. The only, the only thing they have in common is that they both do not have U. S. status for residency, uh, but the ITIN borrower does have credit. In the end, I'm so that's the main components. Now, vary from guideline to guidelines because we all do have to remember that item program is a non Q and program and all guidelines for non Q and programs are specific. To that, to the program option chosen, but typically for an ITIN loan, the borrower will need to have an unexpired ITIN. In other words, their individual taxpayer identification number has to still be valid. They have to have U. S. based credit meeting the program guidelines that has been selected. They have to have an unexpired picture ID. It could be a us, a state issued driver's license, or it could be a passport from their country of origin, but it usually has to be unexpired. And this tends to be one of the issues affecting item borrowers the most, because depending on the state there they reside in, they may not be able to obtain. a driver's license without full legal status and depending how long they've been living in the U. S., their passport from their country of origin may be expired. I 10 borrowers also may have to provide documents showing their initial entry into the country, so please do review the guidelines carefully. Uh, then depending on the program chosen, Now it's going to be like any of the non QM programs we have. It could be a full doc program where your borrower will be self employed. You know, maybe they can provide tax returns. Remember the ITIN borrower can, uh, uh, submit tax returns with the ITIN. They do not have to have a social security number. The only thing is that the item borrower will most likely not be able to be W2 because W2, uh, will require social security numbers for the employer to file the correct, uh, payroll, the payroll deductions. Uh, to the IRS and, and that cannot be done with an I 10 that can only be done with a social security number. So the I 10 borrower can usually be full doc self-employed, or they can, um, be alt doc, like bank statements, which would be another type of self, self-employed. They can be p and l employed. They can be asset utilization, which has nothing to do with employment, or they can be DSCR, which also. Uh, has nothing to do, uh, with employment. Um, The DTI is going to be chosen. It could be anywhere from 43 to 50%. So you can note that once, um, you get past the hurdle of, uh, making sure that the ITIN borrower has the necessary documents to prove that they are an ITIN borrower, after that, uh, Excuse me, the credit And income docs are going to be very similar to any other loan. You're just going to review the guidelines and you're going to see how the borrower fits the guidelines according to the income documents that they can provide and according to their credit score and if applicable their trade lines. And then obviously you're going to analyze the income, Depending on the and make sure that if it is a DTI based loan that they fall within the DTI range, or if it is a DSCR loan that they meet the minimum required DSCR for the program chosen. So what are some of the loan options that are available for our ITIN borrowers? Well, we have our primary option for purchase, rate and term, refi, and cash out. On a full dock option, we can go up to 80%, excuse me, 85 percent LTV on a purchase and 80 percent LTV on a cash out. Bank statement option. We can also go 85 percent LTV on a purchase and 80 percent on a cash out. 10 99 up to 85% LTV on a purchase, and 80% on a cash out and on a profit and loss, 80% LTV purchase, 75% LTV cash out. Second home is going to be a little bit more restrictive. Our full doc option is 80% on a purchase, 75% cash out with bank statement, 80% purchase, 75% cash out. 1099, the same as bank statement and profit and loss. Also the same as bank statement, 80 percent LTV purchase and 75 percent LTV cash out. And then on our investments, still great options there for purchases, rate and term refi's and cash outs full dock up to 80 percent LTV purchase and 75 percent LTV cash out bank statement. The same 80 percent LTV purchase, 75 percent LTV cash out. Uh, 1099, the same as bank statement P and L the same as 1099 and bank statement. And most importantly, D S C R 75 percent LTV purchase and 70 percent LTV cash out. So as you can see, great options here for our item borrower. And like I mentioned, one of the fastest segments growing segments in the mortgage market. And in our last slide here, I just wanted to share with you all sample guidelines, uh, from a couple of our investors. For example, you'll note the first one, um, pretty basic, right? Non, uh, non permanent resident ailing without a social security number, which is borrower as, can qualify using their ITIN. And notice there, they must possess a valid ITIN card or IRS ITIN letter and an unexpired government photo ID, max TTI of 50%. The rest of this stuff is pretty self explanatory. Now notice the state power of attorney and RON, that's remote online notarization closing, are prohibited because the ITIN is not a U. S. national or U. S. citizen, so their ID Is a little bit more difficult to, to verify, which is why they restrict the power of attorney and remote online notification closing for the item borrower through that particular investor. And then notice the one below, uh, very similar, uh, conditions, um, guidelines, except notice they state that, um, All documentation in the file must support the ITIN, the borrower's ITIN number, cannot reference a social security number belonging to another individual, because then it could mean that the borrower is using someone else's social security number to work. And then they're giving us ways in which we can, uh, document the unexpired ITIN, right? Uh, current transcripts from the irs. gov website or IRS letter, you know, uh, stating the ITIN. Um, uh, the I 10 info or fully executed W 7, including the agent's signature or a letter from their tax preparer confirming they have filed the borrower's most recent tax return with the IRS. So like you can state there, the only thing that makes this loan different from any other loan is just that there's not a social security number involved. There's an I 10. individual taxpayer identification number, and a couple of other restrictions, making sure that the borrower does not have status here in the U. S. So, make sure that you, uh, explore all opportunities, uh, when interviewing your borrowers, and if they do, uh, state that what they have as an ITIN, uh, rest assured. That we do have the loan products for that, and you will be able to get it done. So let me know if you have any questions. I do see a question here. Um, okay. The question is, does the I 10 borrower purchasing property in the United States legitimize residency? Nope. It does not. Uh, Now, the, there is a, um, another program, um, where the borrower can get the, uh, investor visa by investing a certain amount of money here in the US, either 900, 000, uh, if they do it through a shared investment or 1. 8 million, if they do it through their own investment, that's the EB 5 visa, which is the visa that gets the borrower their, uh, permanent residency. Right? And then permanent residency eventually can lead to citizenship. But that has nothing to do with an ITIN loan, nor an ITIN borrower. There's no way for the ITIN borrower to, uh, you know, legitimize their residency like the question asks, solely by purchasing property. So, do we have any other questions regarding, um, ITIN borrowers? Guidelines and ITIN borrower loans. Remember they do have to have us based credit. They do have to, uh, have a, um, valid ITIN document. They do have to be living full time in the United States. And if it's a work based program, uh, the, the income does have to, uh, Be inside the U. S., not a foreign based income. So I'll give it another minute to see if there's any other questions regarding ITIN borrower loans. And if not, please do all seek out, uh, this, uh, fast growing segment. Okay. Not sure if I, I got a question here. Do we have recommendations? For safe gift funds from lenders. I'm not exactly sure what safe gift funds are. And what I was talking about was E B 5, E as in Edward, B as in boy five, the E B 5 visa. That is a visa that does grant the permanent residency card. It does have restrictions on it. You have to invest at least 900, 000 through a shared investment through a research center, or you have to invest 1. 8 million in your own business. And it has to create at least 10 jobs in the U. S. So we have another question. Citizen husband is non citizen. What is the best? loan type. Well, I'm assuming that the non citizen you're meaning is somebody that does not have any status because you can be a non citizen and be a permanent resident alien. You can be a non citizen and be a non permanent resident alien that has a work permit that allows you to work in the United States. The item borrower does not have a work permit and does not have a permanent their residency either. So don't confuse that with a non permanent resident alien. Non permanent resident alien does not have legal status here, is not a resident, but does have a work authorization document that allows them to work here. So if your borrower has the work authorization document then, and they got credit, they're the same as any other borrower. However, if they have an ITIN, So one borrower has the I 10 and the other borrower is a citizen. That's okay. Uh, you can qualify them under the I 10 loan and the borrower with citizenship will be qualified through the same guidelines for that product, right? Um, the guy, we always go to the highest risk individual and set the guidelines according to them. So if you have one borrower with an I 10, And one borrower, uh, with full status, uh, they both have credit, both working here, everything else is the same. Then we're going to qualify that those borrowers based on the ITIN loan, because one borrower is an ITIN borrower and the other has status. So we're going to use the ITIN loan guidelines. For the loan and Got another question here money has to be in there for an amount of time, correct? What I'm thinking they're asking is does the money have to be seasoned in the account for I guess for an ITIN loan Again, remember the ITIN loan is a non QM loan. So the guidelines are gonna vary from option to option but What I can state is that, uh, typically, uh, the money has to be seasoned and sourced. So any large deposit is going to have to be sourced to the account it came from. And there's a certain amount of seasoning that is going to have to be there. Now, again, we'd have to look at a specific guideline. We got probably seven or eight I 10 borrower options. So we would have to review the guidelines on assets to see if they require sourcing and seasoning. And if they do, how many months of seasoning 30 days or 60 days, or in some cases, maybe none, we don't know until we review the guidelines. And that's how we would be able to answer that question. All right. I do not see any more questions. I'll give it another minute to see, but I do thank you all for the questions on your, on ITIN borrower loans. Remember, ITIN borrower loans are available even with a DSCR option. All right. Well, thank you everyone. Thank you for joining us for today's training and I'll see you in the next one.