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Street Capital to Launch Equity Mortgage

Street-CapitalThere’s been no lack of positive news over at Street Capital lately. We just caught wind that they’ll launch a new equity mortgage tomorrow.

The company says the product is geared “predominantly to self-employed and commissioned borrowers.” It’s a “low doc” mortgage offering borrowers a “convenient and streamlined approval process.”

Most borrowers who meet the product’s guidelines will get access to Street’s best rates with no rate premiums.

Interestingly, Street is rolling this out as an uninsured product. The fact that it has secured funding for an Alt-A product like this (without guaranteeing it through an insurer) speaks to its strength as a lender.

Here’s a quick rundown of the Street Equity mortgage:

  • LTV: Up to 65%
  • Properties: Owner-occupied 1st and 2nd homes
  • Credit Score: 650 min. (2-yrs established credit)
  • Loan Size: Up to $1 million in major urban centers
  • Income: Self-employed, commissioned, or salaried
  • Amortizations: 16-35 years
  • Terms: 1-5 year fixed-rate terms only
  • Rate hold: 120 days
  • GDS/TDS: 32%/40%
  • Down payment: Cannot be borrowed or gifted
  • Fees: Apply only to salaried borrowers. No fees on self-employed or commissioned borrowers.

As with many “equity” products nowadays, Street Capital uses a reasonability of income test. An NOA and proof of self-employment are also required. As such, it’s not a pure “equity” product from an underwriting standpoint. Nonetheless, the Street Equity mortgage adds excellent flexibility to its growing product portfolio.

For a higher-level viewpoint, this serves as yet another example of how non-bank lenders are getting improved access to capital following the credit crisis. Non-traditional funding sources are essential for competing with the Big 5’s gargantuan balance sheets.