Linda makes a point about an appraiser requiring something very trivial and causing major problems for her transaction. This is another reason why working with a local community bank with direct access to underwriters is crucial. Here at my bank, 1) we use a local rotation of appraisers, so we can guarantee the appraiser quality, and 2) our underwriters are here in our office, so if something like this comes up we will know about it early on in the transaction and can determine a strategy about how to move forward, instead of coming up in the 11th hour of the transaction, potentially putting the entire deal in jeopardy.
This is NOT a post about the causes of the real estate market collapse. Many causes, many guilty parties, many innocent bystanders caught in the crossfire. One of my favorite topics of debate and conversation. But not today.
Still...despite the multifactorial nature of the meltdown, I think that MOST of us would agree that there was, well just perhaps, a need for a bit of tightening in lending standards a few years ago. Maybe an actual job and actual income WAS, after all, a good idea. Who knew? Maybe some documentation of said income made some sense. Who would have thought? Maybe even providing some extra documentation along the way, FICOs and such, was a worthwhile endeavor when hundreds of thousands of dollars were being loaned. I totally get that, and I try hard to be patient and sympathetic as my buyers' lenders, the good ones that are still employed, now work to create a file to be reckoned with.
But, somewhere along the line towards making things shipshape, we got maybe just a smidgeon carried away. Don't get me wrong...I am a doctor, I am well versed in the art of ass covering. Spiffing the chart...been there, done that. Has nothing to do with improving patient care; I get it. Heck, I have to deal with the Joint Commission on Accreditation of Hospitals on a regular basis, whose primary interest it is to discover heinous discrepancies that must be corrected immediately, else why would their future intervention be needed? But I digress...
Today, I phoned a lender to let h
er know that, although SHE had a holiday yesterday, I was hard at work arranging for a deal to close escrow on a time frame they had established. Need to be on record by Friday, so I'm told. Ok, so on this deal, which already has two appraisals, two inspections and a slew of repairs done by the seller, I have just arranged for a reinspection to assure that all repairs they require are completed. "But what about the appraisal?" she says. What appraisal??? "Well the appraiser called out for some repairs too." Um...yes, he noticed that a couple of outlet covers were missing, is that what you mean? "It needs to be rechecked," she explains. So, you are telling me that you need to waste an appraiser's time, likely several hundred dollars worth, returning to the property to verify that two plastic, $1.50 each, outlet covers were screwed into place? You have GOT to be kidding me! Don't you think the inspector, who will be there reinspecting repairs, probably has the expertise to make that call? Guess you just can't take that chance when ass covering is at stake.
Poll time: how many of you think that the reason the real estate market tanked is because banks weren't nit-picking trivial home repairs? Anyone? Bueller? ANYONE?
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Linda S. Humphrey, M.D., CDPE, e-PRO, EcoBroker, GREEN
Broker/Owner - Humphrey Home Connections Realty, LLC
cell: 775-287-4665
office: 775-232-8515
Nick Pakulla / Loan Officer / NMLS# 728211 / First Place Bank Mortgage Lender / 15400 Calhoun Drive, Rockville MD 20855 / 301.585.7283 / http://www.nickhomeloan.com
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Thanks for the reblog Nick! You make a compelling case for using a local community bank and we have some excellent ones here in Reno.
So, you are telling me that you need to waste an appraiser's time, likely several hundred dollars worth, returning to the property to verify that two plastic, $1.50 each, outlet covers were screwed into place? You have GOT to be kidding me! Don't you think the inspector, who will be there reinspecting repairs, probably has the expertise to make that call?
Not to be ornery - but if the inspector is going there for a re-inspection - didn't they catch those items on their original inspection??
The banks are turning down good loans on good houses to good borrowers. This makes sellers more desperate for buyers, which lowers prices, which makes sellers more upside down, which causes more foreclosures, which hurts the banks even more.
Nick, some local banks are easier to work with when approving a loan. They are closer to he facts on the field and can make common sense decisions.