[Julio Munoz]

Wow. Thank you. Appreciate your guidance and help. Will ask the account execute to escalate file to underwriting department.

[Julio Munoz]

That’s going to be a health and safety issue. The only ways around that are –

Get a contractor to repair the deck and get paid at closing

Decommission the deck and block off the doorway by boarding it up or even using 2x4s.

I have closed them by using 2 2×4 and negating the access to the door

[Julio Munoz]

We appreciate you reaching out to GCA Mortgage Forums.

At Gustan Cho Associates, we specialize in Non-QM loan programs designed for self-employed individuals and anyone who faces challenges qualifying for conventional, FHA, VA, or USDA loans due to credit, income, or underwriting hurdles.

Non-QM loans can be a great fit for self-employed professionals, real estate investors, those with past credit issues, individuals with substantial assets, or anyone with non-traditional income sources.

Based on your unique financial situation and property type, you may qualify for a variety of Non-QM options, such as:

• loans based on review of bank statements for 12 and 24 months
• loans for real estate investors based on the DSCR
• loans for investors based on 1099
• profit-and-loss statement loans
• asset-depletion loans
• loans for real estate investors based on the Profit-and-Loss statement
• loans that require minimal or alternative documentation
• Non-QM jumbo loans
• ITIN mortgage programs
• foreign national loans
• loans for borrowers with recent credit events, foreclosure, bankruptcy, short sale, etc.

At Gustan Cho Associates, we provide a wide range of Non-QM loan solutions, including bank statement, DSCR, asset depletion, 1099-only, and profit-and-loss statement loans. We also offer tailored programs for foreign nationals, ITIN borrowers, and other unique situations.

Wondering how to find the Non-QM loan program that fits you best?

Each Non-QM loan program is designed for specific borrower profiles, with varying requirements for down payment, credit score, interest rate, reserves, debt-to-income ratio, and documentation. Fees and prepayment penalties also differ by program.

To get started, we’ll take a close look at your complete financial picture. Here’s what we typically need:

• Whether you’re financing for the first time or looking to finance again (refinancing)
• Type of property and state
• Whether the property is your primary residence, secondary residence, or an investment property
• Estimate purchase price or property value
• Amount of loan required
• Credit Score
• Amount of down payment or equity
• Personal or business type
• Source of income
• Whether you have recently had a bankruptcy, foreclosure, short sale, or other major credit issue

If you’re self-employed, a bank statement loan allows you to verify your income using your business or personal bank statements instead of relying solely on tax returns.

For real estate investors, a DSCR loan could be the ideal choice. This type of loan focuses on your rental property’s cash flow instead of traditional income documents. We also offer other programs with flexible income verification options.

Our team is ready to review your unique situation and provide personalized guidance.

You may contact us by phone or text at (800) 900-8569.

Alternatively, you may email us at gcho@gustancho.com.

We’re here to review your credit, income, assets, down payment, and property needs, and to walk you through your available options. Gustan Cho Associates is available seven days a week, so feel free to reach out anytime for a no-obligation conversation. Our team is dedicated to answering your questions and helping you confidently explore Non-QM mortgage solutions.

Gustan Cho Associates

NMLS 873293

(800) 900-8569

[Julio Munoz]

Here is a Snapshot of What You Can Expect to Pay in Closing Costs When Purchasing a $600,000 Home in Orange County, Texas.

Texas homebuyers typically see closing costs ranging from 2% to 5% of the purchase price, which means you might spend between $12,000 and $30,000 on a $600,000 home.

Here is a Breakdown of Estimated Closing Costs You Might Encounter in Orange County, TX:

• Escrow fees typically run about $2 per $1,000 of the purchase price, plus a base fee of $200 to $350. For a $600,000 home, expect to pay around $1,400 to $1,550.
• Appraisal fees in Texas generally range from $400 to $700.
• Home inspection costs typically range from $300 to $600.
• Lender origination fees for a $600,000 loan generally range from $3,000 to $6,000.
• Owner’s title insurance costs $2,264 for a $400,000 sale in Texas. For a $600,000 sale, the cost is higher.

Texas does not impose a state transfer tax. Compared to states with high transfer taxes, this saves $3,500 to $9,600 on a $500,000 sale. Home sellers in Orange County typically pay closing costs ranging from 6% to 10% of the purchase price, mainly due to realtor fees and title insurance.

Keep in mind that closing costs can vary depending on your lender, the specifics of the property, and how negotiations unfold. Use these estimates as a helpful guide for your budget planning.

[Julio Munoz]

Flock Cameras are automatic license plate readers sold by Flock Safety, a company started in Atlanta in 2017. These solar-powered cameras connect through LTE and do not need wiring. They are set up along roads, at intersections, in neighborhoods, and at businesses.

Flock cameras take pictures of license plates on passing cars and collect details like make, model, color, and other unique features. Each photo is marked with the time and place, then sent to Flock’s online database.

Police and partner groups can search this database for vehicles. Flock says their cameras do not use facial recognition and focus only on vehicles, not people. The company says its cameras scan over 20 billion vehicles each month and are used in about 5,000 communities in 49 states.

Kari’s View of Flock Cameras

Flock Cameras evoke strong negative feelings for me. I am concerned that government spending on these devices often harms the most vulnerable, exacerbates inequality, and places additional strain on an already overburdened justice system. Flock cameras collect more data on those who are already struggling.

I am also troubled by Flock Safety’s marketing, which presents the cameras as crime-fighting tools, yet their effectiveness is questionable if they primarily capture data from low-income communities.

I am skeptical of Flock Safety’s claim that its cameras focus only on vehicles, not people, and I question how this approach benefits crime victims. In my view, automated license plate readers perpetuate cycles of victimization, and Flock should reconsider promoting these products to the public.

Positive Aspects of Flock Cameras in Public Locations

Flock Cameras in public areas are promoted as tools for enhancing community safety. According to Flock, their technology helped solve 20 percent of reported cases in 2025. In 2024, these cameras assisted in reuniting over 10,000 missing individuals, including kidnapped children, elderly people with dementia, and other vulnerable groups, with their families. Officers receive instant alerts when a vehicle is detected, enabling rapid responses to Amber and Silver Alerts.

The system operates across city and county lines, facilitating interagency cooperation and providing time-stamped evidence that can be critical in criminal investigations.

However, these successes raise important questions about privacy risks associated with Flock Cameras. A major concern is that they create a network of mass surveillance that tracks the movements of all individuals, not just suspects. While Flock states it retains footage for a limited time, the company still collects significant amounts of data on people who have not committed any wrongdoing.

Flock Cameras Can Track Citizens Without Cause or Warrants

These systems also create permanent records of individuals’ locations and associations, raising significant privacy concerns. The possibility that the government can track citizens without cause or a warrant is troubling. There is also a risk that data collected for public safety could be repurposed for immigration enforcement or debt collection.

Instances of misuse have occurred, with some officers using the system for personal reasons, such as stalking ex-partners or monitoring individuals of interest.

The potential impact on free speech is notable, as awareness of surveillance may discourage participation in protests or religious gatherings. Additionally, the installation of microphones without community input has increased public unease. Recent events have increased these concerns. In 2026, the Los Angeles Police Department ended its partnership with Flock, citing serious privacy and civil rights issues. Protests have led to the removal of cameras in many places. The American Civil Liberties Union also started a campaign called “Get the Flock Out” to remove these cameras nationwide.

Do Flock Cameras Infringe on Your Civil Rights?

While new crime-fighting tools often face criticism, Flock Cameras have sparked an especially intense debate. Supporters, including community members, police, and crime victims, argue that these cameras help solve crimes such as property and car theft that might otherwise go unresolved.

Conversely, privacy advocates and the ACLU caution that Flock Cameras enable broad surveillance, collecting data and tracking individuals’ movements without sufficient justification.

Recent decisions by police departments to withdraw from Flock partnerships have heightened concerns. In 2026, the Los Angeles Police Department ended its partnership with Flock due to privacy issues. Nationwide, protesters have removed Flock cameras, and the American Civil Liberties Union has initiated a campaign called “Get the Flock Out” to advocate for their removal.

Concern of Flock Cameras

The backlash is significant for several reasons. Flock Cameras have been deployed rapidly, often without meaningful public input. As more agencies participate, the surveillance network expands, making it increasingly difficult to avoid. Documented abuses have validated public concerns. Individuals across the political spectrum express concern: some fear excessive government control, while others worry about the targeting of specific groups.

Reasons for the Backlash

Much of the opposition to Flock Cameras arises from their rapid implementation, often without local community consultation. Each new agency increases the reach of the surveillance network. Reports of misuse have validated critics’ concerns.

Notably, both right- and left-leaning groups have united in opposition: some fear excessive government power, while others are concerned about the targeting of vulnerable populations.

Flock says its system is controlled locally. Each agency manages its own data, and no other agency can see it unless the group that installed the cameras allows it. Private customers cannot see police data, but they can choose to share their own data with police. Flock stresses that data sharing does not happen automatically and only occurs if someone agrees.

Critics of Flock Cameras

Critics of Flock’s system offer a different perspective. The ACLU and other watchdog organizations argue that, without adequate oversight, the system operates as a nationwide database accessible to any police agency with a Flock contract. They also contend that police can review data without a warrant and that access is broader than Flock’s marketing suggests.

When a camera detects the vehicle entering a neighborhood, police can recover it and apprehend the suspect, benefiting both the victim and the community.

For example, if an 80-year-old woman with dementia goes missing, a Flock camera 15 miles away may capture her license plate, allowing police to locate and return her to her family within an hour. This demonstrates that rapid adoption of new technology can produce positive outcomes in urgent situations. In another case, a stolen vehicle reported at a shopping mall is added to Flock’s Hot List.

Privacy Concerns of Flock Cameras

Another example underscores privacy concerns. For instance, if someone attends a protest, visits a clinic for a private health matter, and stops at a controversial church, Flock’s system records each location, creating a comprehensive record of their activities, even if they have done nothing wrong. This information could later be accessed by investigators, employers, or others who should not have such access, raising concerns about potential misuse. In another scenario, police use the Flock system to monitor someone suspected of infidelity, recording repeated visits to a specific apartment. This represents a clear misuse of the technology, and similar incidents have occurred elsewhere.

Depending on local policies and data-sharing agreements, Immigration and Customs Enforcement could potentially use the database for immigration enforcement, illustrating mission creep and eroding community trust.

The LAPD’s decision to end its contract with Flock raises questions about possible civil rights violations. Concerns about fraud, civil rights violations, and unlawful actions by government agencies are well-documented. Organizations such as the ACLU and the Electronic Frontier Foundation have reported on these issues. The LAPD’s decision to end its agreement with Flock over civil rights concerns demonstrates that these are serious and widely recognized issues, not fringe opinions.

Misuse of Flock Cameras by Law Enforcement

There are documented cases of police misusing the system. Some officers have been dismissed or disciplined for using it to stalk ex-partners or for personal reasons. Although financial fraud is uncommon, there have been instances where the system’s capabilities or data usage were misrepresented to city councils during installation discussions.

A lack of oversight has been found. Rules differ by place, and many communities use Flock cameras with little control over how data is used, who can see it, or how camera security is handled.

Flock’s technology is legal and widely used in the United States. However, civil rights concerns remain prevalent and are actively discussed by city and police leaders. Several major cities have declined to enter into contracts with Flock due to these concerns, indicating that public policy in this area is still evolving and that opposing viewpoints are valid.

[Julio Munoz]

Understanding AUS Findings: Approve/Eligible vs. Refer/Eligible and What It Means for MLOs

For a complete borrower qualification, you must also evaluate AUS (Automated Underwriting System) findings after submitting the file through AUS (e.g., DU, LP). AUS findings will indicate whether the file is pre-approvable or requires additional steps to support processing.

New MLOs often issue a pre-approval letter without reviewing the AUS findings. This step is crucial, and failing to complete it typically results in the loan being denied at a later stage.

Approve/Eligible Findings

An Approve/Eligible finding states that a loan is compliant with automated underwriting by the input of AU findings.

Here is what it states:

• The borrower satisfies the credit and AUS requirements of income and assets.
• The loan’s risk has been accepted by the system.
• The file is eligible for purchase by Fannie/Freddie (DU/LP, respectively)

Even so, the loan is not fully approved.

You still must:

• Validate AUS findings and all income and employment.
• Confirm and clear any conditions in the AUS findings.
• Validate assets and the source of the funds.
• Review credit for any undisclosed or inaccurate debts.

A common phrase in the industry is, “Garbage in, garbage out.” Should any erroneous data be entered into AUS, an approval is of no value.

Refer/Eligible Findings

A Refer/Eligible finding indicates that although the loan cannot be accepted due to an automated underwriting decision, it may still be accepted via manual underwriting.

This means that:

• The system cannot automatically determine the borrower’s risk profile.
• The final decision will be made by a human underwriter.
• More conservative guidelines will be implemented.

The most common reasons for Refer/Eligible findings include:

• Low credit scores
• High debt-to-income ratios
• Thin credit profiles
• Recent negative credit events
• Inconsistent income

Given the findings for these files, you must be especially cautious when considering any form of pre-approval.

In general, you should only consider issuing a conditional pre- approval or pre- qualification when:

• Documentation is reviewed in full of strong compensating factors. (Reserves, low DTI, and employment with manual underwrite)

When NOT to Issue a Pre-Approval

Do NOT issue a pre-approval if:

• AUS findings have NOT been run.
• Findings are Refer/Eligible with insufficient documentation.
• Income has NOT been calculated.
• Credit has significant unresolved issues.
• Assets are insufficient or NOT verified.

Pre-approval requests in these cases give the borrower and the real estate agent a false sense of confidence.

MLO Pre-Approval Checklist (AUS-Focused).

The following requirements must be met before a pre-approval letter is issued.

• Completed loan application (1003)
• Credit report assessed
• Calculated and documented income
• Verified employment history for the last 2 years
• Down payment and reserve funds verified.
• AUS findings recorded (DU or LP)
• Conditions in the AUS findings were assessed
• DTI is within program restriction
• No undisclosed obligations or concerns
• Compensating factors identified (if required)

All requirements met, and AUS is Approve/Eligible? You are ready to issue a pre-approval.

If not, take the necessary time to address the issues to avoid concerns later.

Final Thought

AUS should be leveraged as the strong resource it is, but AUS is only as good as the input. A great MLO uses AUS and other resources at their disposal, validates, documents, and verifies each piece they work with prior to issuing a pre-approval letter.

You ensure the best experience for all parties involved by taking the time to do it right the first time, and you protect your personal reputation by preventing any fallout from a soured deal.

Follow-up focused on manual underwriting guidelines and compensating factors is also a possibility, of course.

[Julio Munoz]

The content below centers new MLOs on best practices and informs them about common underwriting mistakes.

Common mistakes made by new mortgage loan originators include issuing a pre-approval letter prematurely. An actual pre-approval is not a guess or based on a hunch. An actual pre-approval requires the originator to verify the data and documentation and to complete a thorough analysis of the borrower’s credit, income, assets, and liabilities. This is one of the most common reasons a loan is denied at the last minute.

Initial Borrower Interview

A detailed borrower interview is the first step in a pre-approval process and must be conducted to answer the most important questions required to build the loan file.

During the interview, you will need to obtain the borrowers:

• name, Social Security number, and residency status
• current housing situation
• potential purchase price and down payment
• type of housing (primary, secondary, investment)
• co-borrowers and non-occupying co-borrowers

The interview is also the most appropriate time to explain what pre-approval is and what it is not.

Employment and Income Analysis

Of all the borrower qualifying factors, income is one of the most important. A completely different approach is required, rather than simply asking, “what do you make?” to determine income.

Ask and confirm:

• Length of employment (two-year history standard)
• Employment type (W2, 1099, self-employed)
• Payroll structure (salary, hourly, commission, bonus, overtime)
• Consistency of income (at least two-year history)
• Other income, such as:
• Social Security benefits
• • Pension
  • Alimony or child support (must be continuance tested)
  • Rental income
  • Royalty income

When reviewing self-employed applicants, assess business stability, income trends (declining or increasing), and the tax return.

Credit Evaluation and Debt Assessment

A credit report includes more than a score.

Review:

• Credit scores (qualifying middle)
• History of payments with recent late payments
• Revolving v. installment debt
• Debt-to-income (DTI)
• Negative credit events:
• • Collections and charge-offs
  • Judgments or liens
  • Tax liens
  • Bankruptcy and foreclosure

Be careful of disputed tradelines. Some loan programs will not allow a closing with disputed tradelines.

Be aware of liabilities that are not reported on a credit report, such as:

• Federal delinquent student loans
• Federal IRS payment plans
• Undisclosed debts that are discovered through public record searches

Assets and Documentation

Do not issue a firm pre-approval without reviewing the documentation that supports the request.

The following is a frequently required list of documentation:

• The last thirty (30) days of paystubs.
• The last two (2) years of W-2’s or 1099s.
• The last two (2) months of bank statements.
• Government-issued photo identification (ID) and social security (SS) verification.

For the self-employed

• Two (2) years of personal and business tax returns.
• Year-to-date (YTD) profit and loss (P&L) statement.

How Much House Can They Afford vs. How Much House Can They Qualify For

MLOs must make this distinction clear to applicants.

• Qualify: Based on the lender’s policies, income, credit, and debt-to-income (DTI) ratios.
• Afford: Based on the borrower’s comfort level, lifestyle, and financial goals.

There are maximum loan amounts that an applicant can qualify for, but a loan of that amount is often not in the applicant’s best financial interest. MLOs must help applicants understand what the monthly payments (P+I+T+I+HOA) would be, including their other financial obligations.

When you should be issuing a pre-approval letter:

A pre-approval letter should be issued only:

• When credit has been pulled and reviewed
• When income has been calculated and documented
• When assets have been confirmed
• When DTI has been run through the automated underwriting system (AUS)
• When no other major issues have been identified and resolved

If any of these steps are omitted, you are issuing a weak pre-approval, which is a huge disservice to your applicant and may lead to denial.

APPLY NOW and Credit Report Link

To help you stay process compliant:

• APPLY NOW link: Let’s applicants securely submit a full loan application online.
• Credit Report Link: Lets the loan officer pull credit and review liabilities.

MLOs must especially encourage applicants to do both early in the process to prevent surprises.

Final Thought

There are many benefits to receiving a strong pre-approval for everyone involved in the buying and selling process. When MLOs take the time to pre-qualify buyers, the process is less stressful and more efficient. MLOs have a greater responsibility to homebuyers than simply loan approval. They must ensure buyers are ready for the process.

SUBJECT PROPERTY: Enter an estimated purchase price and average property tax for a similar property in nearby area. For example, a three-bedroom, two bath home, 1,500 square feet may average $275,000, $4,000 property taxes, and $1,200 annual homeowners’ insurance. Here is the link to the best mortgage loan calculator http://www.gustancho.com/best-mortgage-calculator/

gustancho.com

Best Mortgage Calculator | PITI, PMI, MIP, and DTI

The best mortgage calculator powered by GCA Mortgage Group is different than the competition due to PITI, PMI, MIP, HOA, and DTI features.

[Julio Munoz]

A chattel loan is a type of financing that is secured by movable property rather than real estate. In a housing loan, chattel financing means the lender’s security is the home (i.e., a manufactured or mobile home built to be moved) rather than the land on which the home is sited. When a home is not legally affixed and not legally part of the real estate, it is a piece of personal property. In that case, a lender may provide financing in the form of a chattel mortgage. In a chattel mortgage, if the borrower defaults, the lender has the right to repossess the home; the lender cannot foreclose on the land.

For barndominiums and similar home designs, whether chattel financing or financing as real property is used primarily depends on how the home is affixed and how it is titled. If the home is sited on land owned by the borrower and is permanently affixed, it is typically financed with a real estate mortgage. If the home is treated as personal property and is on a leased parcel, several lenders may offer financing as a chattel loan. In this situation, only the structure may be used as collateral, while the land is excluded. When it is said that “these units are chattels,” it means the units are treated as personal property and require chattel financing, as opposed to traditional land-and-home financing.

Chattel loans differ from conventional mortgages when land ownership is absent. In these cases, the home or structure, along with attached improvements, serves as the sole collateral. Rather than county land records, the lender secures their lien with the appropriate personal property or titling registrar. Chattel loans, like personal installment loans, also have fixed rates and, in the manufactured housing space, generally have shorter amortization periods and higher interest rates than other mortgages. The lender sets the underwriting criteria and, while they differ from agency mortgage lending, have more in common with auto and RV loans. The income documentation is often comparable to that used in mortgage underwriting.

The land element is introduced as a lease with the landowner or the park. The borrower executes a land or pad lease that contains lot rent, term, and park rules. The chattel lender typically requires a lease with an adequate remaining term and may assess the park’s stability and requirements, as losing the site could negatively affect the collateral. Lot rent is also handled separately from the loan payment, much like ground rent or an HOA fee under a traditional mortgage. Lot rent is, in fact, a housing cost. Lot rent is paid to the landowner or park to occupy the lot, and nonpayment of lot rent allows the lender to reclaim the collateral even if the loan is in good standing.

The total monthly housing cost includes several factors from the borrower’s perspective. First is the chattel principal and interest payment. Second is home insurance, which may be held in escrow or paid directly. Third is lot rent, which is high in many parks, with many markets seeing lot rents in the $700-$1,000 range. Lot rent may also cover property taxes, park property owner costs, water, snow removal, sewer, trash, and other common services. Lot rent, water, and other common services can be considered utilities. These costs are part of the borrower’s total monthly housing payment. Lot rent, insurance, and utilities may make the total monthly housing payment appear to be a PITI payment for a stick-built residence, even though the home’s loan amount is smaller.

Both parties in this scenario assume unique risks. The borrower regards lot rent as a pure cost that may increase in a lease renegotiation. The borrower gains no equity in the lot. For the lender, if the borrower is evicted or the lease is terminated, the lender has a problem on their hands, given that the home may need to be relocated, a costly process, or even impossible if the home is an older unit. The lender may also have a loss of equity if the home cannot be relocated. The risk of having to relocate the home is one reason the cost of a chattel loan is higher than that of a traditional loan, and it is also why lenders conduct extensive due diligence in examining the park rules and lease terms.

In comparison, for borrowers who own both the home and the land it sits on and therefore have titled the property as real estate, the financing is likely to be a conventional mortgage, in which a deed of trust or mortgage is filed with the county land records. Here, the collateral is the land and improvements, with a 30-year term and a rate based on the real estate mortgage market. For the housing costs, the principal, interest, property taxes, and insurance are based on the real estate, with the HOA or ground rent paid in addition. In the chattel situation you are inquiring about, the borrower’s equity is in the building, with financing for the building only; the cost of the land is paid as a separate lot rent and is not financed or included in the loan payment.

[Julio Munoz]

You are NOT answering the question and going off on a tangent. Again, my question is very specific. I am getting conflicting answers by different mortgage brokers and mortgage lenders. Again, QUESTION: CAN YOU USE an FHA 203k LOAN ON A MANUFACTURED HOME that is sitting on a permanent concrete foundation and needs total renovation. Thank you.