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
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