Tag Archives: Selling a Home

Selling a Condo or Home Within a HOA? Make This Info and Documentation Available Now

Selling a Condo or Home Within a HOA?  
Make This Info and Documentation Available Now

http://www.genemundt.com/Default.aspx     If you’re a prospective Home Buyer and considering the purchase of a Condominium … or a home located in and governed by a Homeowner’s Association (HOA), there is important information you need to know regarding prior to signing a contract.

(For further info, read 2 of my previous posts on Condo/HOA buying: “To Condo or Not to Condo”. That Should Be the Question …”  and … How to Determine if You’re Viewing a Condominium or Townhome”.)

Some of the details a new Home Buyer should know regarding Homeowner’s Associations are:

  • Rules governing the Homeowner’s Association (HOA)
  • Restrictions attached to the ownership and use of the property
  • Assessments, Fees, Dues *

* Are any of these Assessments past due?  And if so, what percentage?

  • Budget of the HOA
  • “Health” of the HOA
  • Status of Reserve Funds
  • Percentage of Owners versus Renters

If you’re on the flip side of the transaction and the SELLER of a property impacted by a Homeowner’s Association, what information and documentation should you disclose and make available to prospective Buyers?  https://1609956119.secure-loancenter.com/FreeConsult.aspx

As most Buyers will also be utilizing a Mortgage to purchase the property, the following info and documentation will most likely be required from a Seller, the HOA, or the Signee (property holder) involved in the transaction.

Note:  Be aware that the Mortgage Lender representing the Home Buyer will need or request some of the following info/documentation also.

    • A copy of the HOA Budget/Accounting
    • Declaration and By-Laws
  • HOA Questionnaire and/or Survey  

In Illinois and the Chicagoland area, a HOA Questionnaire/Survey will be requested by the Mortgage Lender or Buyer’s Attorney.  There is typically a charge for the Homeowner’s Association to fill-out and prepare this document.  The person responsible for this payment is often designated as part of the Real Estate Contract.

Sellers that make these documents and information available to potential Home Buyers (and their representatives) and take measures to act proactively provide a great service.  They help facilitate their sale, the transaction, and the Buyer’s mortgage application more quickly and smoothly.

Should you be thinking of selling a home or condominium located within a Homeowner’s Association, start gathering this information and documentation sooner than later in the sale process.  That way there will be opportunity for fewer delays caused by a Buyer’s questions or requests.

As an added piece of information: 

Please be aware that in the cases where the Seller is a Bank, or an Entity such as Fannie Mae, Freddie Mac, FHA, or VA, often times there will be little or NO information made available to the Buyers from the Sellers.  In other words, the Buyer MUST track these down themselves through whatever means.

Bottom line, there may be some “inherent” risks and extra “work” involved when buying a property that has been Foreclosed upon.  The “price” may be discounted, but so may the “offerings from the Seller”.  This can be especially true when the property is a condominium.  That’s why working with a Mortgage Lender, Realtor, and Attorney experienced in these types of transactions is so very important.

If hoping to buy a Chicagoland Condo, or home located within a Homeowner’s Association … contact me today.  I’ll put my 37 years of Mortgage experience and knowledge hard to work on your behalf.

I can be easily found at any of the following:

Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281

 

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Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL. 

 

Is it the Right Time for You to Sell Your Present Home & Buy the Next?

 

Is it the Right Time for You to Sell Your
Present Home and Buy the Next?

 
https://1609956119.secure-loancenter.com/FreeConsult.aspx     The final decision to Refinance your existing Mortgage (or  not), should be based on one simple thing.  It must make good financial sense …  

     That decision is often times determined by the length of time you, as a Homeowner, “guesstimates” you’ll own your loan (i.e., stay in your present home).  A good rule-of-thumb is that the monthly payment savings received through the Refinancing (at minimum), should “pay back” your Closing Costs for your Refinance.  

     Similar (and additional) considerations need to be made by those Homeowners hoping to upgrade or “step-up” to a bigger and better home and becoming Home BUYERS again.  For those in this situation, it’s important to remember: 

     ALL transactions are not created equal.  In most transactions, Home Buyers pay a “fixed” amount of Closing Costs.  “Variables” that affect that amount could be (but not limited to):

     Sometimes, these costs can be paid for by the Sellers, if negotiated into the Sales Contract.  Otherwise, Home Buyers can easily pay up to $5,000 for costs associated with buying.  In simple math this equates to:  A Homeowner’s 5-year stay in their purchased home costs $1,000 a year.  ($5,000 of totals costs, divided by the number of years in the home (5), equals $1,000 of costs per year.)

     This fact also needs to be considered: During the time you’ve lived in your home you’ve paid down your Mortgage balance … year by year, payment by payment.  Maybe you’ve even paid some extra to the Principal too.  

     On the Sales side of their transaction, Sellers must remember:  Their home’s Appreciation or Depreciation in value must also be considered.  In a good housing market, the home will have appreciated in value during that duration of time.  That Appreciation helps to cover the costs they as Sellers face when they move on.

http://www.genemundt.com/ContactUs.aspx     As a Seller, it’s a good rule-of-thumb to assume that costs will equal 8% to 10% of the Sales Price of your home.  That varies of course, depending on the state, city, county, and the percentage of Real Estate Commission being paid.

     While your decision to move can be ruled by emotional reasons or the need for a lifestyle change, the decision should definitely include financial considerations, as well.  No matter your reasons, if you’re ready to move, it’s important to “do the math” regarding a move and sale.  Obtaining a Realtor’s opinion of what it will take to sell your home is wise.  

     Down Payment funds are critical to any purchase, but especially for those Selling one home and buying another.  BEFORE you agree to list your home and sell it, get Pre-Approved by a Mortgage Lender to discover your options or limitations for purchasing your next home. 

     Most U.S. Homeowners consider a move within the third and fifth year after their first purchase.  National averages have shown that most 30-year Fixed Rate Mortgages last an average of  7 years (approximately).  When Sellers retain control of the timing of their moves from one home to another, they are more likely to come out ahead.  

     Is it the Right Time for You to Sell Your Present Home and Buy the Next?  Possessing the facts and information needed to make sound financial decisions greatly reduces the stress that accompanies the Buying and Selling of a home.  

     In Chicagoland, contact me so we can discuss your plans and do the math for your personal scenario.  We’ll discover what options exist for you.  That way you’ll be better prepared to make sound Sellingor Buying decisions …        

http://www.genemundt.com/ContactUs.aspx

     

*   I can be easily found at:

Direct:  815.524.2280
eFax:  815.524.2281
Cell or Text:  708.921.6331

 

Click HERE for your FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
https://1609956119.secure-loancenter.com/WebApp/FullAppLogin.aspx

 

 

 

 

 

 

 

 

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Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL

 

 

 

Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs

Preparing to Buy a Chicagoland Home:

Seller-Paid Closing Costs

– See more at: http://activerain.com/blogsview/4308152/preparing-to-buy-a-chicagoland-home-seller-paid-closing-costs#sthash.spFanGOx.dpuf

Preparing to Buy a Chicagoland Home: 
Seller-Paid Closing Costs
https://1609956119.secure-loancenter.com/FreeConsult.aspx     Looking out my office window right now, you’d never know that Spring … and Spring’s busier Chicagoland housing market isn’t that far off.  Yet, it’s true …

     Chicagoland First-time Home Buyers (those typically purchasing homes from the low $100K’s to the low-$200K’s) and anyone else hoping to buy during this upcoming Spring’s warmer-weather market, should be making their plans NOW, while winter snow is still on the ground and temperatures are frigid. 

     So, if you’re a hopeful Chicagoland First-Time Home Buyer (or anyone seeking Mortgage financing) what should you be considering or educating yourself about right now … at the beginning point in your process?

     First of all, find yourself a knowledgeable, experienced Mortgage Lender to work with.  Not sure how to do that?   

     Here’s a few suggestions:  

     Inquire with Real Estate Agents that transact in Chicago or the Chicagoland area in which you hope to live.  Check with Real Estate Attorneys, your friends or family members that have Closed on a Mortgage loan recently. Talk to Insurance Agents or others that work in the local real estate industry.  Gather names and note those mentioned multiple times. 

     Don’t skimp on the attention you give this matter.  Do your homework.  Find the right person for you.  (For more help and guidance, click HERE.)

     Once you’ve found your Mortgage Lender, have a long talk with them about your finances and your Credit.  Get Pre-Qualified to discover:

  •   What Home Buying options exist for you
  •   Your Credit Scores 
  •   Your Credit capabilities
  •   If elements of your Credit need polishing 
  •   The Price Range of home you can buy
  •   Establish a timeframe for your upcoming purchase

     
     One of the most important topics you’ll talk about with your Mortgage Lender will be regarding a Down Payment on your home purchase.  At this time in the year, I often hear from Borrowers that Income Tax Refunds will be a contributing source to their Down Payment funds.  

     For Buyers hoping to utilize Income Tax Refunds during their home purchase (or Agents working with those Buyers), it’s critical to make sure that Income Tax Returns are filed as early as all supporting documentation (W-2’s, etc.) is received.  Tax Returns should be filed electronically, as this  expedites the depositing of Tax Refunds into Checking or Savings Accounts.

     It’s important for Home Buyers to know:  Income Tax Refunds ARE acceptable to Lending Underwriters when saving/accumulating assets to buy a home.  Since most loan programs require Down Payment funds to come from the Buyer, it’s important to demonstrate Down Payment funds as verifiable money in accounts.  (Accounts can be Savings, Checking, Money Market, Mutual Funds, Bonds, Stocks, and Retirement.)

http://www.genemundt.com/MortgageChecklist.aspx

      

Keep in mind that the:
  • Minimum Down Payment on FHA Loans is 3.5% 
  • FHA requires a 3.5% Down Payment, but ALL or PART of that Down Payment can be a Gift
  • Minimum Down Payment on most Conventional Loans is 5% 
  • At this time, it remains totally acceptable for Sellers to pay Closing Costs.  

     In the case of Sales Prices under $100,000, it’s almost necessary to get Seller-paid Closing Costs due to new regulations in place as of January 10, 2014, per the Consumer Financial Protection Bureau (CFPB).  Certain Closing Costs ARE allowable when Seller-paid.  That simply allows your Mortgage Lender, to cover the cost of traditional fees incurred in a Real Estate purchase at Closing time. 

     I’ve included a breakdown of the guidelines (as of this writing) on the maximum allowable Closing Costs that a Seller can pay.  These Costs are expressed as a percentage (%) of the Sales Price …

     For Conventional Loans:

  • Fannie Mae –  3% if Owner-Occupied  *
  • Freddie Mac – 3% (2.5%in some cases) if Owner-Occupied
  • Investment Property – 2%

    *  Can be greater, if Loan-To-Value is less than 90%
     
     For FHA:

  • Up to 6%

     For VA:

  • Up to 4% 

    
Preparing to Buy a Chicagoland Home: Seller-Paid Closing Costs …  As you can see, there’s quite a list of things to talk over with your Mortgage Lender when you hope to buy a Chicagoland home.  It’s normal to have lots of questions.  So, let’s get started and get those questions answered.  Contact me now so together we can best prepare you to buy a home …

http://www.genemundt.com/ContactUs.aspx


     *  Hoping to Buy, Refinance, or Build a Home in Chicago or the greater Chicagoland area?  Contact me!  I’ll put my 36 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:

Direct:  815.524.2280
Cell or Text:  708.921.6331
eFax:  815.524.2281
Click HERE for a FREE Mortgage Consultation!
Ready to Apply for your Mortgage?
 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   Digg Acct. of Gene Mundt, Mortgage Lender
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender   Lender411 Acct. of Gene Mundt, Mortgage Lender    Klout Acct. of Gene Mundt, Mortgage Lender    Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender
Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL.

Decide Which Size Fish You Want to Be

Decide Which Size Fish You Want to Be
 
“It is better to be a big fish
in a small pond, than to be a
small fish in a big pond “
The Galveston Daily News, June 1881
Contact Me for a quality referral to an experienced agent today!
     It was reported recently by the  National Association of REALTORS  (NAR)  that “median existing single-family home prices are rising in more metropolitan areas, but a lack of inventory  –  notably in lower price ranges  –  is limiting buyer choice in an increasing number of markets around the country”.  (Latest Quarterly Report)
     They have evidence of rising home prices too.  Prices rose in 110 out of 147 metro areas.  And another statistic of interest that configures into the overall picture on current market status is this … Distressed homes (foreclosures and short sales) accounted for 26% of recent sales.  That percentage being down from 33% a year ago.
     Many other news and housing data sources report much of the same.  Housing inventory is down in many markets.  Selection is suffering.  Look at these examples:
Selling your present home with the hopes of buying another?  Contact me Today!
     And while inventory definitely influences purchases and housing prices, other things, such as Buyers’ ability to purchase, also are playing a big part.  Recent indications show that current home buyers are now proving ample income and can meet down payment requirements when seeking financing for their new home purchases.  Don’t forget too, interest rates are at historic lows, and monthly payments on home purchases remain favorable to home buying.
    So … what should all these reports and facts mean to someone thinking about SELLING their home?
     It means, if you’re contemplating a sale, NOW might be the time to act.  It means, that the old adage shown above … “It is better to be a big fish in a small pond, than to be a small fish in a big pond” … could definitely work in your favor as you list and sell your home.
     How?? As I see it, it boils down to this:  Choices.  Which size … and what kind … of home-selling fish do you  want to be?
  •  Do you want your home to stand-out?  Create curb appeal.
  •  Do you want potential Buyers to imagine themselves living in your home?  Make any needed repairs.  De-clutter, clean, and stage your home well.  Modernize.  Make it appealing.
  •  Do you want Buyers that fall in love with your home .. and then act decisively, and respond quickly with an offer?   Price your home realistically.
  •  Do you want to be the best and most desirable home in your area’s “pond”?  Act now to take advantage of current low inventory levels.  Contact an agent today.
     I can tell you, as a  Mortgage Lender,  what I’m hearing backs-up the stats and news articles currently being reported above.  I’m hearing complaints about home inventory and property choices all the time, from both home buyers and agents alike.  Good condition, well-priced homes are scarce.
     But I’m also hearing … Good condition, well-priced homes get attention.  Good condition, well-priced homes sell quickly.  And I know for a fact that … Good condition, well-priced homes arrive at their new Buyer’s Closings successfully.  They appraise out.  Underwriters find fewer issues to raise.
    “Good condition, well-priced”.  Does that describe your  home?  It can, if you prepare properly for your sale.  It can, if you listen to and follow  the experienced advice of your real estate professional.
         Now is the right time to list and sell your home. Recent NAR reports and statistics back that decision up.  So do others.  They also prove the wisdom of the old saying,   “It is better to be a big fish in a small poContact Gene Mundt, Mortgage Lender for an Agent Referral todaynd, than to be a small fish in a big pond.”
 
   You as the home seller just need to wisely … “Decide which size fish you want to be” …
     * Hoping to become a successful home seller in  Will County, Chicagoland, or elsewhere across our nation?  In need of a referral for an experienced, successful real estate agent to help you sell your home?  Contact me  today.  I’ll be happy to refer you to the best in the business.
     I can be found at any of the following:
Cell/Text:   708.921.6331
Email:  genemundt
Skype:   630.219.1316
Mobile:  m.genemundt.com

What Kind of Personality Do YOU Have? Take This Quiz!

     My wife has a friend, that as of these last few weeks … you’d better not be found standing still around her.  If dormant even for a second, she’ll clean and polish you, store you, or throw you out.

    Every conversation Marilyn has with Lisa is peppered with the relatings of Lisa’s lastest cleaning and purging adventures.  I guess that explains why the topic of storage and storage techniques was on my wife’s mind when she discovered the handy-dandy website offered below.
 
    While visiting one of her favorite websites, (Better Homes and Gardens – bhg.com),  Marilyn found the following  “personality quiz”. 
 
    Being somewhat of a lover of these things anyhow, this  BHGStorage Personality Quiz  really caught her eye.  This quiz combines the topic of psychology with the art of de-cluttering.  Seems there are differing personalities regarding someone’s zeal and tastes for storage and the art of de-cluttering.
 
     So this got me thinking …  
 
     If as someone hoping to sell your home, you take this test, find out your “storage personality”, and implement the information you tap … can you make the de-cluttering of your home:
 
  • Easier to accomplish?
  • The task and outcome more psychologically appealing?
  • Increase the likelihood of the sale of your home?      
     Hmmmm …  For those presently in the process of selling their homes and those considering it in the near future, there may be something of real substance to consider here!  (Stagers!  Weigh in!)  And, it might not a bad idea to consider for those of us just wanting to spruce up the homestead or make our lives more efficient either.
 
       So, go to:  Better Homes and Gardens … Storage Personality Quiz Take the test to find out what storage techniques and solutions work best for YOU.  The  Better Homes and Gardens  site offers tips, photos, and videos that will help you accomplish your storage and de-cluttering tasks and goals … all in a style that pleases your eye and fits your unique personality. 
 
      Enjoy!      
 
       
        *  Just as there are many storage personalities and styles to be found, there are many mortgage programs available for consideration when buying or refinancing a home.  To find out what mortgage program suits YOU and your personal finances best, contact me at:  http://www.genemundt.com/Contact-Me.html.   Together we will analyze, then work towards finding the  perfect mortgage for you.
 
Gene Mundt, Professional Mortgage Banker
NMLS  #216987
Chicago Bancorp –  NMLS #63483
Cell/Text:  708.921.6331

Let the Sellers BEWARE … and be AWARE. Playing Offense & Defense While Selling a Home

Let the Sellers BEWARE … and be AWARE!                                  Playing Offense & Defense While Selling a Home …

    Huh? Beware?  Thought that was the Buyer!    

    Not these days!  Agents, buyers, and sellers must know how to play DEFENSE and OFFENSE throughout a property transaction.  This “one-of-a-kind market” delivers much more for each of them to consider than ever before. 
 
    Prior to the present challenging market, sellers asked their agents, “What will I net in proceeds at the closing of my sale”? Now, more often the question is, “If I sell my home for less than I presently owe on my mortgage, what happens?  How does that work for me?  What does it do to my credit and my financial future?”
 
    During the last week, further complications have occurred within the mortgage industry.  These complications surround the ability or inability to close on foreclosed properties.  This muddies the waters for sellers, their agents, and potential buyers even further.  You can’t overlook how it effects we mortgage originators as well.  No one at present, is happy.
 
    Many agents are now finding that they have performed their services, listed a property, maintained a vacant home, its’ land, secured a buyer, assisted with securing the financing, ordered the inspections, and much more … only to be told that as of now, the loan cannot close.  A seller’s attorney may possibly say that the lender has “halted all deals on foreclosures until further directions or notice”. 
 
    No one knows how this will play-out, as of right now.  I personally am trying to stay calm … and positiveas possible at this point, with the hopes that this latest twist in the story will be given the utmost and urgent attention needed … and what we ludicrously have called “normalcy” within our industry, will return fairly quickly.  Time is definitely of the essence, but it’s hard to be definitive regarding a time element with this. Our clients deserve the truth and our understanding of the situation, as it presents itself in the future. 
    
    For agents working with sellers experiencing the now common problem of being  “under water“, this latest mortgage revelation can post quite a problem as to proceeding with a transaction of this kind.  These sales are definitely not for the timid.  An agent better be a “Vince Lombardi”, a coach of sorts for their sellers.  A coach that retains tight rein, handles their “team” with firmness,  presents great strategy, and displays a willingness to tell their team what they might not want to hear … but must
 
    In every sense of the word, this agent must prepare the sellers (“team”) to play stellar offense and defense in order to survive and win in their game of home sales.  
 
    But what if the seller (team) disagrees with the philosophy laid out by the agent (coach)? 
 
    Just as a coach in major league football,the agent mustbe in charge as the expert.  Just as a coach during any game, the agent does the seller no favors long term if they allow the homeowner to dictate an unreasonable sales price for their home. No one wins if that ends up happening, and in fact it does everyone involved a grave disservice.
        
         If need be, a coach must be willing to forego a full touchdown and glory and go for the short field goal … if that decision positively wins the game.  A short sale is much the same thing.  From a Credit Bureau and lender’s viewpoint, it is definitely a more positive outcome for a seller than foreclosure.
 
     In the future, a seller that sold “short”, and received the bank’s approval to do so, fairs much better than a seller that walked away from their mortgage obligations.  They can return as buyers much more quickly. 
 
     Ultimately, everyone on the team must have the same “goal” … coach and player … agent and seller.  Success is won much more easily if everyone is of one mindset and works all in one direction and together, playing offense and defense within their transaction.  Educated, well-informed, “well-coached” sellers accomplish this best. 
 
     If you are a seller and are working with an agent fitting this definition, you are blessed. Listen carefully.  Discuss thoroughly.  Move ahead with confidence in their wisdom and expertise.
 
     “Let the Sellers Beware … and Be Aware”!
 
 
 
    *  For Buyers and Sellers in the Naperville/DuPage County, Joliet, Plainfield, Shorewood, Will County, Chicagoland areas seeking an experienced, professional real estate agent or broker, or other real estate professional … please contact me for referrals.  I will be happy to supply you with the information you need.
 
         For those seeking mortgage, credit, or financial information and guidance, please contact me also.  Information regarding my services, my background, and more can be found at my website: http://www.genemundt.com/.
 
         You can follow me on Twitter, my Facebook fan page, and LinkedIn.  Your comments and contacts are very much appreciated.

Appraisals Are a Growing Obstacle to Successful Lending and Transactions

     At a time where low interest rates should be acting as a catalyst for economHousing Industry Shooting Oneself in the Footic growth and increasing personal wealth by decreasing debt, the “industry” can’t seem to get out of its own way … and it’s possibly even shooting itself in the foot.

     Simply put, appraisals are becoming a real problem within a real estate transaction and refinance. 

     Right now, Fannie Mae’s new appraisal guideline revisions are very vague.  They can also instill fear into Lenders’ opinions of just what constitutes a “fair and good” appraisal report and value … a reaction that ultimately declares ” We may not buy this loan if the appraisal is weak or inconclusive”. 

     The appraisers themselves have figured out that the Underwriting Process is arduous and extremely thorough (rather like being under a microscope and bisected), and they seem to be moving increasingly towards the conservative side of values.  Obviously their thinking is that it is easier to justify and support more conservative amounts.  But to me, this does not seem like a healthy recipe that will initiate a turnaround of housing values … or one that will chip away at the oversupply of housing units now on the market.

     I, for one, am confused.

     The industry has a Government-Insured Program for Loans as high as 96.5% of Value or Sales Price.  (Thank you FHA!)  Without this Program, the Market would come to a screeching and complete halt.  Loans closed in the last two years have performed well. 

     Too Many Cooks in the KitchenAre those appraisal reports any more soundly completed than the conventional appraisals for Fannie, Freddie, and the Lenders?  Yet, there seems to be a greater degree of scrutiny on an appraisal for a Conventional Loan where the buyer has 20% down (80%) LTV.  Why?  There is a real fear that the loan won’t be purchased by the GSE’s (Fannie Mae, Freddie Mac).  If a buyer has less than 20% down and needs private mortgage insurance, this just adds another set of “eyes” to the equation and overlaps the process once again.  To stick with the cooking theme … there are too many cooks in the kitchen, during these instances!  

     As a lender and former appraiser, I so get it.  Values (collateral) are a HUGE part of the Lending Equation currently, as the last few years have taught us.  But, let’s not suffer a knee-jerk reaction and ultimately add to the housing supply problem by making transactions painfully slow … or halting them completely … when there is a willing buyer hoping to pay an “agreed upon” price.  An Appraiser’s inability to justify a sales price or an Underwriter’s concern because a value isn’t properly “bracketed” or supported, shouldn’t completely derail a transaction.

     Inventories continue to rise, or are holding steady at best.  These inventories need to decrease, if the troubled housing market is to ever turn around.  Refinance Programs offered by Fannie Mae and Freddie Mac allow for Loan-To-Values of 105%.  That is because those Borrowers have done the right thing and have a payment history to prove their loan’s soundness.  IMO, this appraisal issue needs to be reasoned out on the purchase side.  This is a very serious and growing issue that demands attention NOW … not later.

     Possibly another resolution to this problem could be found in making every property held in a Bank’s or Fannie Mae’s, Freddie Mac’s, or HUD’s REO category, have an “appraisal of record” for a designated amount of time … say 3, 4, or 6 months.  This would allow this appraisal to be valid for a Buyer’s Lender to use for that new loan.  A home inspection could be made mandatory for those deals, so the current condition of the property could be made known.  (FHA, I give you due credit on this idea … as this must sound familiar.) Squeezing the Consumer Dollars

     Traditional Sellers hoping to move on must not be forgotten either.  Have they not already taken a big hit in home values over the last few years?  If they once paid more than what they are selling for currently, do they really need another appraisal or Underwriter announcing to them … “we just lowered the Sales Price or Value of your home even more”?

     There is no easy anwer to this growing problem.  One thing I know for sure though … DOING nothing, SAYING nothing, and OFFERING no new alternatives is not an option.  If this issue/topic has begun to cause you real problems or angst … make it known.  Only then may we begin to see some solutions or resolutions to this problem.

Gene