Intro: My purpose here is not so much of a rant but just to put some of the whacky recent experiences I've been involved with in helping my clients navigate their way to successful closings on purchases involving loans. My underlying motivation is that others will write their own experiences and while I understand it's a long shot - perhaps some common sense will return to the lending industry.
This one is really too much. About a month ago we had an appraisal come in on one of our transactions at $237K. We were happy as the contract price was $235K and so we thought we were good to go with an appraisal that's $2G's over contract price.
However, underwriting rejected the appraisal because there were too many adjustments on the appraisal (the home had too many upgrades - like a shop, hot tub, detached bunk house/hobby/craft room, huge covered RV parking area etc).
Because of these upgrades the bank declined the loan. When I protested I was told "well if the buyer's were only putting 3.5% or 5% down instead of 20% and mortgage insurance was in place. We could do the loan" .........
Let me get this straight - this is what you're telling me. The reason that you're denying the loan is that
1. the home is too nice.
2. and the buyer's are too strong.
That's just nuts.
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