Getting stricter still!!!
Not just on borrowers....but thier houses as well!
Dear Valued Business Partner:
In today's market environment, Countrywide, Americas Wholesale Lender remains committed to helping our broker Business Partners assist qualified borrowers in finding appropriate home financing solutions to meet their financial needs. This level of service is critical for all mortgage professionals to maintain a good reputation, perpetuate referral business, and continue to be a long term provider of home financing services in our industry.
Because of todays challenging market, we have identified several potential Soft Markets nationally that will now require additional steps in the appraisal and review process. For the counties listed below, additional appraisal due diligence controls have been implemented in an effort to make decisions based on accurate current market values and trends.
Effective immediately for all loans that have not received loan approval by November 19, 2007 (and until further notice), Countrywide guidelines provide for the following to be provided for all appraisals in Soft Markets:
Two (2) of the comparable sales must have been closed within the last 90 days if available.
At least one current listing or pending sale. Listing or Pending Sale comparables should be included in the appraisal comparable grids. A picture should be provided if available but is not required.
Sales are to be verified through a reliable party not associated with the subject property (i.e. MLS).
Provide number of days on the market for subject property (if a sale) and comparables sales.
For new projects and developments:
•o The appraiser must use at least one current sale form the subject builder/developer in the project, and EITHER:
• One current sale from a competing builder/developer, OR
• A resale from within the subject propertys development that has closed within the last 30 days.
- Provide at least one current listing from the Multiple Listing Service (MLS) or pending sale and include it in the appraisal comparable grid.
- Provide days on market for subject and comparable sales (if applicable).
If an appraiser is not able to provide the information requested, then an explanation is required. The appraisal may then be subject to additional review.
Appraisals for all loan types, including HELOCs, where the property is located in a soft market, the appraisal / effective date must be within 90 days of loan approval. (FHA and VA programs are excluded).
The 5% max LTV reduction applies only under certain circumstances; therefore in cases where it does not apply, it will not be necessary to resubmit the loan
Finally, a 5% reduction in the maximum allowable LTV/CLTV will be required when the appraisal (original or review appraisal if required) indicates any one of the following:
1. Declining values
2. Over supply
3. Time on the market is over 6 months.