Attention Realtors in Arizona:  We are in a market identified by Fannie Mae to be a declining market.  Tom Burris wrote a great post a couple of months back warning all about this:  Attention Realtors in Declining Markets!!!

Well this is real and let me elaborate more upon what Tom stated in his post.  I have 6 loan files that are closing this month, and already I have had 2 of them require an appraisal review.  An appraisal review is when the appraisal completed is reviewed by the underwriter and they decide to get a 2nd opinion on value.  Yes, this usually requires an internal review of that appraisal and requires a 2nd opinion to be given on that appraisers findings.  Luckily both of mine came back fine. 

Here are some files that I have noticed that are being targeted.  I deal with a lot of first time home-buyers, so if your client is borrowing either 97-100% of the sales price, and the homes zip code falls within a declining market value, then this home might need an appraisal review.

The underwriter can also make a decision to NOT borrow to that client at 100% value if they are worried about the value declining further.  This has not happened to me yet, but my company has already set some rules in place for these very unique situations.

If your client is putting 10% or more down, then this should not really be an issue. 

Right now is not the time to being working with amateurs who do not understand your local market.  Please make sure you are working with a Mortgage Lender who understands these real issues.