The Jumblog

This post is not tech related; it is a “beware” for all Realtors out there on their upcoming deals and hiccups that have been happening recently in final underwriting.

Appraisals - Many areas of the country are now considered officially “declining markets” by the national lenders. This coupled with the “over supply” in the markets are raising red flags for lenders in final underwriting. Appraisers are checking these two boxes on the appraisals more often now. As of January 1st, these loans may have their terms changed as they come out of final underwriting and their terms amended when the underwriter sees it! Most likely they will ask for an increase in the downpayment. (Exceptions are rare now for gifts from family also.)

As of April 1st, we are also seeing the first appearances of the “risk assessment fee” by lenders across the board. Buyers with a credit score under 700, and a small down payment (less than 20%), and/or higher LTV, are also coming out of underwriting with new specs. Most often it is a 1/2 to 2 point assessment at settlement to keep the terms the lender quoted you at the automated underwriting stage. No grandfather clause on these either!

Moral of the story is to stay up with your lenders on a frequent basis and find out about the new trends. They are slowly becoming facts of life on a national scale and causing even more purchases to fall apart right before settlement.

Good luck out there!

Steve