Admin

The underwriter: a desk jockey with too much power?

By
Real Estate Agent with Caldecott Properties 01372814

Today I would like to make you aware of a little unknown (perhaps) dirty bank secret, that is actually used more often than you think.

This is a true story. I have not used any specific names except for the bank name.

A buyer  has been pre approved with Chase bank to buy a condo in litigation. The Chase loan officer, from the beginning, informed buyer that Chase has no problem with financing as long as the litigation is not building / structural related, which it is not.

So the buyer goes through the whole buying process, and gets an accepted offer from seller. The inspections are done and the property is extremely clean.

The appraisal gets done, and it take the  appraiser about 10 days to write the report, but the property is appraised at value.

So buyer and seller obviously think this is a done deal and seller is preparing for the move out. Buyer is preparing for the move in and negotiates, as tenant, a move out date at his current place.

THEN THE DISASTER HAPPENS.

The underwriter at Chase does not agree with the appraisal, and will thus not fund the loan. 

The underwriter, whose name is unknown and the loan agent is not sharing with us, has simply decided, without giving any reason, the bank will not underwrite this loan.

When asked, via the loan agent (who I now think is either incompetent, or was not upfront with info), what they think is wrong with the appraisal, they decline to answer. When asked what value they came up with, they decline to answer. When asked why the buyer was not informed of this underwriting desk jockey who does not know anything about the property or the area , they declined to answer.

The underwriter, most probably is actually a pencil pusher with a calculator, hiding behind this desk. 

I vote for having the bank "reveal" why underwriters do not approve an appraisal, or why they are not willing to underwrite. I think it 's part of the RESPA rules. I also think the bank breached these rules in this case, and should be penalized. The buyer should get all his money back he has spent on the buying process. 

You think banks have stopped abusing buyers, then you are mistaken. You have the name of the bank. Your decision if you think you should still do business with them.