Sunday, February 03, 2008

TIC Spotless Loan Records

This article in the Chron highights the success of the $500 million in fractionalized loans that local banks have delivered over the past couple years:
With defaults rising like the tide and cresting in foreclosures, the blame has often focused on lenders who took chances with "creative" loan products. But there's one kind of home loan that is reporting a virtually perfect record. No defaults, no foreclosures and, according to some experts, not so much as a late payment.
Ironically, this exceptional record is not associated with some Fannie Mae-underwritten conforming loan for single-family homes, but a newfangled lending product that was thought to be so risky and so innovative that mainstream banks still won't touch it. Such is the ironic success of the Tenancy in Common fractionalized loan..."
Why are these TIC loans such a booming success? Comes down to three simple principles, the same three things that used to be the foundation of all mortgage lending: TIC owners occupy their properties, TIC owners put a minimum of 20% cash down toward a home purchase, TIC owners go through a rigorous credit check before being approved for the loans.

So the question remains - why are TIC loanholders still being penalized with punitive interest rates?


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