Really guys, I've been wearing long pants for quite some time now...I can take it! And, believe it or not, most of my buyers can, too! So if you can't see your way clear to qualifying them for a mortgage loan, just say so! But, on the outside chance that you do actually issue a pre-approval, please don't jerk us around for another five months, while you pull out more and more hoops to jump through!
I can remember when a bank or mortgage company would run a buyer's credit, verify their income and the source of the down payment, and then give them a conditional approval. Generally that approval would hold, barring any problem with the appraisal, or some other unforeseen development. Well, those days are gone...long gone! Now, fast frame to the present! The buyer's credit is approved, their employment is verified, and the down payment requirements are met. Great news...they're finally pre-approved! Time for the champagne? Not by a long shot! Now's when things just start to get interesting....Now's when the goal posts start moving, and they don't stop moving until that wire finally hits the title company's account...that is, if it ever does hit!
Our market is South Jersey, specifically Camden County. A significant chunk of our business revolves around rehabbing, listing, and selling single family rowhomes in Camden City...it's a niche business, we're committed to urban renewal, and we believe that home ownership is a necessary part of the process. It should come as no surprise that we very often find ourselves working with first-time home buyers. The challenges should be obvious, but even where these prospective homeowners have actually managed to maintain a decent credit score, and a steady, full-time job (not small accomplishments in our present day economy), it seems that there is always another obstacle to overcome. Then there's the property appraisal. This is where your real fun starts! It matters not that the appraiser is able to establish value, despite a "declining" market. It matters not that the home meets, or is made to meet, FHA property condition standards. It matters not that the buyer is satisfied with their professional home inspection. No, what it will probably all come down to is some further ludicrous demand from your Underwriting department!
Case in point....we are currently struggling to bring to the table a small FHA deal...we have been for over 4 months now! The buyers have (finally) been fully qualified, the property has appraised for value, and the seller has completed the mandated laundry list of FHA repairs, termite treatment, etc. (the file is two inches thick!). Think we might be good to go??? Well, not so fast! It seems there is just one more pesky little requirement left to clear your underwriting department. It appears that the appraisal stated that "the subject basement exhibits dampness, and a possible plumbing issue. A plumbing certification is required". So the seller pays a licensed plumber, who issued a "clear" plumbing certification. Requirement satisfied??? Well.....not exactly. Just for safe keeping, you now want a structual engineer to perform a "structural review" of the foundation. By the way...did I mention that this is a $37,000 deal?
We may just have to order take-out!