From my lender The Mortgage Advantage
"Arguing with underwriters regarding property values has long been a time honored skill. But that was so 2006 and now no arm wrestling is allowed. If your client buys a property with a limited down program (and it is the deal of any century!) and that undersold property is determined to be in a declining market, your buyer will still have to come to the closing table with 5% more down. If an investor or snow bird (second home) are putting 10% down, and if the property is determined to be in a declining market, again an additional 5% down will be required. All of the lenders still have 100% programs……but if the property is deemed to be in a declining market or the appraiser makes a notation of such, the buyer will have to come in with 5% down. Fannie is also requiring appraisal audits of files before funding. Getting dizzy? Who is the wizard behind the curtain making these decisions? Fannie Mae and Freddie Mac have a built in valuation module in their automated underwriting systems. Some banks are utilizing their own zip codes. Last week two major banks initiated two levels, declining and distressed. FHA and VA have kept quite on their stand on property valuations. But if the FHA or VA appraiser states the property is in a declining market, it is up to the individual bank if they are going to require additional money down. WARNING: Soap Box: The government is trying to revitalize the housing market with increasing FHA and conforming loan limits (Fannie Mae is the largest purchaser of conforming loans) We have buyers who want to buy and sellers that need to sell. The “declining market” is hobbling efforts to get our homes sold. How does this make sense?"
Related Posts
{ 0 comments… add one now }