Expect lenders to scrutinize appraisals in these markets. Be prepared to see the appraiser needing additional comps and even recent listings to support value.
See full press release!!
https://www.efanniemae.com/sf/guides/duguides/pdf/current/rnsuppdodu57.pdf?referrer=durn
While the recent credit tightening in mortgage lending has mostly been contained to the Subprime and Alt-A(low doc) markets..... Full Doc borrowers will be affected if the collateral is not 100% verifiable.
I would NOT be surprised to see lenders counteroffer previously approved 100% deals with a 95% limit. I haven't seen it yet, but I do expect it.... at least in the declining markets(or areas where value is hard to determine).
What does this mean for realtors? Quite simply, valuation will be tight. So, those deals with all of the seller paid closing costs will be harder to do. Work with your Mortgage Lender to determine borrower strength. Make sure you use your financing contingencies to assure the protection of the borrower's earnest monies. Offer your services to the appraiser should they have difficulty providing the additional comps that may be required.
No, I am not asking you to do the job of Lender & Appraiser. I am informing you that to remain highly successful in the current climate, you should be willing to think AND work 'Outside The Box'. <== I hate that term. So cheesy and overused.... but my thesaurus is broke.
Maybe now is a good time to take that Loan Officer up on that cup of coffee.
Good luck.
DallasLoanGuy.com originates Texas Home Loans and specializes in running EVERY file through Automated Underwriting because I truly believe that EVERY loan file deserves the efforts of 'no stone goes unturned' in looking for the best deal.
Tom Burris
DallasLoanGuy.com
Dallas, TX
"A Home Loan For Every Texan"
Renee, you are definately on top of your game.... I wish you were in The Great State so we could work together.
You should write an article on this from a realtor perspective
I agree...I'm told the banks are telling the appraisers to appraise conservatively then back another 5% of that
Hey Chuck: Thanks for stopping by.
Eric: I have a problem with that.... NOONE should influence the appraiser's opinion!!!