We wanted to thank our business partners for their participation in our Realtor Round Table discussion, meeting face to face with underwriter and an appraiser along with representative from the Home Builders Association we were all able to come together to have a frank discussion concerning today's market and the challenges we all face. We believe communication among from all parties in each stage of the real estate transaction allows us to see what each of us face and come up with solutions and tools to help each other. Thank you so much for your participation and we wanted to recap the discussion here for the benefit of those business partners that could not make it to the discussion. We will continue having these roundtable discussions if you are a realtor in our area who is interested in attending our next round table please feel free to email us or comment on this blog. Thanks again so much for your participation and input!
APPRAISALS and UNDERWRITING:
1. Vapor barriers
2. Issues with property prior to appraisal (avoiding multiple trips i.e. delays to closing)
3. Criteria for certain programs may have changed
4. Seller preparation - an ounce of prevention worth a pound of cure
5. Communication with appraisal under new rules (YES! you can speak with an appraiser)
6. The importance of comparable sales and the challenge in today's market
7. The effect of appraisal service companies vs. doing business locally
8. Certain products (VA, Bond Loans) require the use of an appraisal service company to be used
9. How the appraisal fee is determined
10. The final inspection after repairs and report to realtor
11. Repairs - what we are underwriting
12. Inspection - when it may be asked for by the lender / underwriter
13. The climate in today's market in underwriting
Matt Morrow brought us updates on the construction side of the market and the challenges and hope for the builders moving forward.
Vapor Barriers- this is a USDA requirement - if the home is being listed and noted as USDA eligible financing it must have a vapor barrier according to USDA guidelines. It is noted that there is not a consensus among builders whether this is something that is good to have or not, USDA leaves no room for compromise on this topic.
Property conditions and possible issues at appraisal begin with the first listing appointment. Having a tool that is updated on what is exactly required for FHA, VA, USDA would prove invaluable to both agent and homeowner as this would avoid delays and allow the seller to be better prepared on what could be asked for by a buyer or by the buyers lender. We are working on a tool that will help our business partners at their listing appointments to communicate these items to their potential clients. Property condition requirements and what FHA, USDA and VA might focus on may have changed. Knowing where they are focusing will be addressed in the tool we are working on.
Communication with the appraiser, once the value has been established and the report is produced any party is allowed to contact the appraiser to discuss what is in the report, or get something clarified.
Remember the comparables that are required to be used have very strict limitations being placed on the appraiser by Freddie/Fannie guidelines. Adhering to those standards ensures that the appraisal will be accepted by the investors and underwriting.
Metropolitan National Bank utilizes a select small group of local appraisers for each of the locations. We do NOT hire an outside appraisal service company, which allows us to adhere to current guidelines while knowing the strength of the appraisers we do business with. There are 2 exceptions; VA - where VA will hire the appraiser, and MHDC First time home buyer bond loans where the appraisal will be ordered through the service company of the Bond Servicer for the state of Missouri. Metropolitan National Bank's process allows for appraisal fees to be the lowest cost and not inflated due to middle agents tacking on fees for the service.
We discussed communicating with the realtor after a final inspection is completed by the appraiser, and possibly sending the report to the real estate agent. This report is part of the appraisal that is paid for by the borrower and the borrower will always get a copy. We cannot send the full report to the agents, but can send an e-mail indicating the appraisal received final approval from under-writing.
When it comes to repairs - health and safety issues are going to stand out, and will be reviewed and potentially a requirement to be remedied may be issued. There has been a shift in FHA underwriting requirements that may have the property inspection report be reviewed if repairs are mentioned in the contract.
More now than ever, knowing who you are doing business with is imperative and can make a world of difference in how smooth a transaction can occur for you and your clients. Navigating the rules, understanding the lending climate and the market information takes greater communication between knowledgeable professionals. We hope that we have added value to you by bringing a group together to discuss the challenges we each face on a daily basis while working together to provide the best home buying experience for your clients.
"COMING TOGETHER IS A BEGINNING
KEEPING TOGETHER IS PROGRESS
WORKING TOETHER IS SUCCESS"
-Henry Ford
To Our Success!
The Metropolitan National Bank Mortgage Team
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