Mortgage Grapevine

Property in LLC showing up on credit?

I have a borrower with an investment property in the name of his LLC. If we run credit will this show up?

Anyone know?


by hcg November 4, 2009 4:23 PM

It shouldn't unless he personally guaranteed it.

You should prolly spring for the credit just to make sure that you have a deal.

Do you WANT it to show up on credit?

If if doesn't and your borrower doesn't disclose it, it'll be fraud.

You'r going to have a hard time hiding it if you have to provide tax returns, etc. or even a 4506t, you'd be busted.

Why do you ask, please elaborate.


by ICD's No. 1 Groupie November 4, 2009 4:27 PM

i just had this come up.

the loan wasn't on my client's credit because he didn't personally guarantee the loan. he did show income from the property on his returns from the LLC. so put it in the REO section to be safe (even though i didn't think i should because it's not in my client's name, it's in the name of the LLC which he's a 1/3 partner in), but the idiots at provident told me to take it OFF the REO section, and put it in his employment section. as if he was employed at the LLC, and the rental income was listed as "other income" from the LLC.

i thought it made no sense of course, but who am i to argue with the great and almighty idiots at PF.



by ind-mtg November 4, 2009 4:52 PM

Provident was correct. If the property is in the name of an LLC it should not be on his REO section, as he does not own it.

Borrower probably had to personally guarantee that loan so it should be on his credit bureau. Either way if he personally guaranteed it it should go on his list of liabilities.
by Vinnie The Leg Breaker November 4, 2009 5:01 PM

that doesn't make sense to me.

it's an LLC, so the debt is not in his name, and neither is the property. everything is held under the LLC.

why would you list the liability, but not the asset? they go together. not trying to be a ball buster, i seriously don't understand that. it doesn't make any sense.

btw, i asked 2 underwriters from other lenders, and they said to put it in the REO section too.
by ind-mtg November 4, 2009 6:06 PM

I'm gonna side with Vinnie.

If the mortgage/note is in the name of the LLC only, but the borrower had to personally guarantee it, then is SHOULD be listed in his schedule of liabilities and counted in the debt ratio- just like a co-signed debt. But, if you get 12 months cancelled checks showing the LLC paid the note, then you should be able to exclude that liability for the borrower.

However, it should NOT show up on his schedule of REO, as he does NOT own it- the LLC does. And, yes, the LLC should be listed as an employer, and any income (or loss) for the LLC should be reflected in the borrowers income.


by XpressOH November 4, 2009 6:16 PM

Wasting your time trying to educate that one.


by vine stone thrower November 4, 2009 9:11 PM

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