100% LTV With Low Score

SouthStar touts \'Simple Score\'
By MortgageDaily.com staff
5/13/2005

A subprime wholesaler said brokers have been submitting record numbers of packages because of its new 100% loan-to-value program for borrowers with credit scores starting at 540.

SouthStar Funding will announce on Monday that its newest product, Simple Score, "bases credit decisions almost entirely on the borrower's middle FICO score. Simple Score is available to borrowers with credit scores 540 and higher, on all property types up to $1 million and for up to 100 percent LTV."

Guidelines for the new program, which are located at www.SouthStar.com/Rates/Highlights.aspx?id=59, require three open tradelines, limit residential delinquencies to 1x90, and allow no seasoning on bankruptcies or foreclosures.

The program was made available to SouthStar's existing broker base late last month, the Atlanta-based company said.

"This matrix removes most of the 'ifs' typically needed to qualify a borrower while being extremely easy to use," company executive Michael Fierman said in the announcement. "The results are loans that close more smoothly and quickly, more efficient underwriting and processing and a greater pull through rate for our brokers."

Daily subprime loan submissions have doubled since the program's rollout, SouthStar said, as well as activity on the online prequalification tool.

The 700-employee lender reports wholesale production exceeded $4 billion last year -- rising "sixty-fold" since inception.

PMAC Lending Services Inc. recently announced it started offering stated-income 100% financing on 1-4 unit, nonowner occupied properties and second homes. Under PMAC's program,

The 100% combined LTVs for 3-4 unit nonowner occupied properties allow a minimum credit score of 720, according to an e-mailed statement to MortgageDaily.com. PMAC provides both first and the second mortgage.

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