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THE MORTGAGE-Yesterday, only pulse required; Today, only Superman need apply.

By
Real Estate Agent with Re/Max Realty Centre

Welcome to blog numero uno. I have no idea what I'm doing so perhaps I should become a lender. Not a loan officer, but the head honcho, the big cheese, the guy who decides to whom my underlings will actually loan money for the purpose of buying a home.

Today I am one ticked off Realtor. My lovely Veirs Mill Village listing just went back on the market. The contract is dead, kaput, null and/or void. Loan fell through at the last minute. Underwriters are sooo timid these days!

VMV is a neighborhood of post WWII homes situated in Montgomery County, Maryland. The homes are tiny..,little 648ers I call them in reference to their square footage listed in the tax records.  From 1999 through  2006,  value exploded...fueled by  the  SELLER'S  MARKET  that started  in 1999  and greased  by  "easy  money"  made available  to just  about anyone  who had a  pulse.  At the peak,  those  little rascals would fetch $400K if fixed up nicely. But alas the bubble burst (the balloon deflated) and today VMV is short-sale city. For the most part, if it's for sale, it's a short sale or a foreclosure. Inventory abounds and prices are dropping like a rock.

My lovely listing is one of the very few non-distressed sales available and I was pleased to entertain not one but two contracts after only a few short weeks. The prevailing buyer "seemed" qualified. He was a legal immigrant who went through the Acorn counseling program and had a lovely letter from CitiMortgage stating he was qualified for a conventional loan just for clients who go through credit counseling. As part of due diligence, I spoke with the loan officer. He seemed to know what he was doing. So after some minor adjustments, we accepted his contract.

Next came the big hurdle. With declining value in the neighborhood very prevalent, I sweated the appraisal. Met the appraiser with a smile on my face and comps in hand (Note to Realtors: if you want to get the appraiser "on your side", SHOW UP ON TIME. They like that and are often not afforded that courtesy). A few days later I got the word. It appraised! Yeehaw and Hallelujah! Hello settlement and hello paycheck!

The time for loan commitment and settlement were only a couple days apart, so when no timely commitment letter was forthcoming, I advised my Sellers to simply wait for settlement. In Maryland, if you don't get a commitment leter on time, you notify buyer and he then has 3 days to get you the letter. The day before settlement, I called the loan officer. "We got problems" he said.

Settlement day arrived. Loan officer called to advise me settlement wasn't going to happen. We talked for about 20 minutes and he told me his sad tale of woe. Seems as though he, too, had done due diligence as far as the guidelines for this loan was concerned. Got screwed by underwriting. If he was faking  frustration,  he sure fooled me. 

So, I want to be a CEO for a big company that lends money. If I have no common sense and screw things up BIGTIME, no problem. I'll still get my golden parachute and then Aspen or maybe Vail.

 

Show All Comments Sort:
SacramentoCommercialLoans Bank Turn downs welcomed
Sacramento commercial loans - Sacramento, CA
Quick closings 916-847-7212

First off good first post. I am sorry about your listing but you are right, what is worse is the amount of misleading lenders that are still out there. Try waiting 30-45 days on major commercial loans only to be told sorry. We get a lot of angry folks who come to us because of our business, but I can tell you they are way mad with their bank and I can only imagine the agent that just lost the sale.

Gook luck

Jul 31, 2008 03:10 PM
Ronald Gillis
Southwest Florida Notaries (Mortgage Notary Signing Agent) - Port Charlotte, FL
CNSA Southwest Florida. Notaries, Port Charlotte, 941-7-NOTARY

I certainly can sympathize!  It has gone from one extreme to another, but in time, (HOPEFULLY SOON!) will come more to the middle where it should have been all along!

Signature

Jul 31, 2008 03:16 PM
Laura Warden Nordin
Century 21 Camco Realty - Albuquerque, NM
30-year Top Producer in Greater ABQ Real Estate

You're right-- the underwriters have gone nuts. Not long ago they were eager to write over 100% LTV for folks with credit scores under 500--- now they're making doctors with 6 figure incomes and 800 credit scores jump through hoops. Why, oh why, do we always have to have such a pendulum swing from one ridiculous point to the opposite insanity?

Jul 31, 2008 03:20 PM
Thomas Hargreaves
TriStar Financial Services - Eugene, OR

Isn't that the truth...

Jul 31, 2008 06:27 PM