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second appraisal

By
Real Estate Agent with RE/MAX Advantage Realty

I just read the blog about the underwriters asking for a second appraisal two days before closing.  I was not in the real estate business when all the bad lending was going on, but I cannot believe lenders were so careless or greedy or both to lend money the way they did.  Now as is typical when a mistake is made, the pendulum has swung far to the other side.  I know that it is now very difficult to get a loan even when you have good credit and a down payment of 5%....Life is stressful enough for everyone now...why are the lenders now closing the gate after the animals are free!!!!!

Posted by

Betsy Hartge

Comments (3)

Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

Because they want to make sure that the loan is still for a property that is worth what the PA is promising.   The lenders are not making loans on property that may have lost value since the PA was written, there may be attached property missing on the walkthrough which the buyer(s) will deem makes the property less valuable....if it it a bank-owned and vacant for months, there may be vandalism (read theft or destruction). 

Aug 13, 2010 02:26 PM
Anonymous
Nicole Dorn, CRS, Elite Premier Properties, Inc.

This just happened to me with BofA. The file was in closing when they started questioning the chain of title. The seller was an investment company who had bought the home six months earlier for $120,000 less than they were selling it. The home was priced properly. The first appraisal came in at purchase price. BofA decided to do a second appraisal (actually a third because the sellers had one done right before we put the house up) and they ordered it from their own staff appraiser who brought the value in at $35,000 below the sales price. Needless to say, the deal fell apart. I found this to be a conflict of interest on BofA's part. I do believe the pendulum has swung way too far to the other side!

Aug 13, 2010 02:46 PM
#2
Ken Barker Realtor® GRI, E-Pro Certified
Dilbeck Real Estate - Burbank, CA

Betsy - Underwriters and appraisers are going to run our world. Lenders are already there. What boggles me is that the way we used to view a "no problem appraisal" was when the appraisal was based on the loan amount. Now it seems that we are gauging on the purchase price not the loan amount. 20% or 60% down it doesn't seem to matter anymore.

Aug 13, 2010 03:21 PM