As we all know, the underwriting process is very tough right now.  Source of funds and build­ing permits are two areas to be aware of.  Over the last couple of weeks lenders have become increasingly picky about "sourcing' any and all monies deposited into escrow or the buyers bank accounts.  Monies given to the buyer as a gift for down payment or closing costs must be sourced and traced with paperwork showing the person had the money to give the gift, proof the money came out of the identified account, and proof the money is deposited into either the buyer's bank account or escrow.  If the appraiser mentions that a property has building addi­tions the lender will want permits.  Before the new appraisal guidelines (HVCC) the appraiser would go down to the city building department and research the property for permits.  Because the appraisal management companies are paying the appraisers less money to do the appraisals, in may cases the appraisers are no longer doing the research.

 How Does This Affect Us As Agents?

    The more you know about the lending situation the better prepared you can make your buyers and sellers.  Lending requirements will remain tough until property values start to increase and banks and lenders begin to feel confident in the housing market again.  The government is working hard to inject money into the banking system to make loans easier to qualify for but until the banks and investors ease their underwriting guidelines we all need to put our seat belt on and hold on for a wild ride.