Demand for REO Financing Reintroduces Loan.(Managing REO)

Byline: Amilda Dymi

Seattle, WA-Demand for 100% financing options that can return increasing REO inventory into affordable housing options in a credit tightened marketplace has pushed at least one mortgage industry veteran to reintroduce the Mana loan.

The product offers an alternative in times when the focus is towards loan modification options or loan products insulated as much possible from default risk, which often is believed to be associated with borrowers who do not put money down. Although 100% financing still exists, Evelyn Nichols, the ideator of the Mana loan, may represent a a minority among her peers who continue to believe in such options.

Back in 2003 Ms. Nichols introduced the patent pending Mana Loan, a product she expected to market test during the mortgage boom years. The Mana Loan was also the reason why she established the Mana Co. LLC. Now she wants to reintroduce the Mana Loan, which is a 100% financing option.

Had the Mana Loan been widely available in the market, she said, those borrowers would not have defaulted now.

Her Mana Loan did not take off as she expected back then because "lenders were busy making money with the subprime loans," she said. Beyond the "what could have been," she insists the concept of the Mana Loan is viable and a great product in today's market.

It can serve especially well both borrowers interested in affordable housing and lenders and servicecrs facing growing REO inventory costs.