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Mortgage and lender issues preventing recovery

By
Real Estate Agent with Caldecott Properties 01372814

I have in the past written about the fact that lenders actually are "unwilling" to lend and are using every excuse in the book not to lend. It is still happening today, and if it is not the lender that rpevents a deal from closing it is the appraiser. So what can be done about it?

Here is perhaps a suggestion we should consider. If the bank refuses to lend based on appraised value, then we should make the banks pay for the appraisal. Here is the logic. Who is protected with the appraisal? THE BANK, not the consumer. So if the bank wants to use a process by which they can refuse to lend, then they should pay for that service and not the buyer. The buyer was already pre approved for a certain loan amount (based on percentage  of purchase value of property). If the banks wants to do a risk analysis and deny the loan, that is part of THEIR process and protects them. They should pay for the appraisal up front. IF and only IF the bank approves to fund at the pre apporved values, then, maybe,  they  could be reimbursed by the buyer for that service.

I think this will get more loan funded at the level the buyer was PRE APPROVED already. It also makes the appraiser not the dictators they are today ( it is my way or the high way), mostly working for the banks, not the buyer.

Looking forward to your responses.

Antoine

Comments (3)

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Real Estate Faster - Los Angeles, CA

Thanks for sharing, that is an interesting idea!

Jan 11, 2012 06:26 AM
Steven Cook
No Longer Processing Mortgages. - Tacoma, WA

Antoine -- interesting, however, as MLO there are couple problems with your suggestion.  First of all, we don't lock in with a specific lender until we lock the rate (sometime after the appraisal - depending on which way rates are floating).  So it wouldn't be the bank/lender paying, it would be the mortgage loan company.   Currently, the appraiser has to be pulled at random draw from a pool of appraisers -- if they were only being paid by the banks, we would probably be headed back into problem that brought about reforms in working with appraisers - and if not, would end up with lots of lawsuits about problems with appraisers.

Jan 11, 2012 08:28 AM
Antoine Pirson
Caldecott Properties - Oakland, CA
When integrity is important to you too

Hello Steven: not sure I follow or see what you mean exactly or why there is a problem. You can only lock a rate when you already know who the lender is no? That is what mortgae broker tell me here. The request for the appraisal comes from the lender, not the mortgage broker as the mortgage broker may not know the content ( names) on their (the lenders) "list". It does not matter who the appraiser is in my opinion, but he should be paid by the bank until the loan has been approved and funded at the pre apporved rate/amount given to the consumer. Until then the consumer is not "charged".

Thanks for the reply.

Jan 11, 2012 09:41 AM