Underwriting Standards are Choking Off Market Comeback
Real Estate Agents have moved from one battle to another as we tackle adversarial market forces in a never ending attempt to create real estate transactions in today's challenging market. The latest adversary: underwriting guidelines gone wild! Sure, lots of loans were made in the past to folks who could not afford them. I guess the only solution available was to totally shut down the market with loan underwriting rules that prevent even well qualified borrowers from obtaining loans to purchase a home. The straw that breaks the camel's back is an appraisal process that totally ignores the importance of local knowledge in the valuation process. Our industry needs to let Washington know these regulations are stifling any resurgence in the residential real estate market.
Sally English and The English Team. Atlanta real estate agents
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Sally, you've hit on a great idea for a new group here : "Underwriting gone wild!"
Applause Applause....Just started hearing...the underwriter wants the.....Home inspection, the repair/update quotes...the...the ________has never been there and is clueless.....!
Your right.
However Washington doesn't care and are clueless. These are all distractions that are killing the market not helping. We need a balance between the extremes and it will have to come for the market to recover.
I had a home in March where the Seller noted "settling cracks in the foundation" in the property disclosure, the home went under contract, home inspector checked the "acceptable box" in the Home Inspection report, buyer removed the home inspection contingency. THEN two days before closing the underwriter would not approve the loan without a structural engineer going out there and signing off on the home! She said that the home inspector was not a structural engineer and could not, by law, sign off on the condition of the foundation.
We tried to fight this, as the cracks were super small and I have never seen a home in my area without a single crack, but my seller had to pay several hundred dollars just to get the letter to say the home was fine and the buyer had to stay in a hotel with his stuff in storage for about 4 days as the closing was delayed.
100% Exact - A - Mundo!!! The lending side of the housing industry screwed things up in the first place and now it is still them who is choking the life out of it once again.
The current appraisal process is driving down prices in our area - take the lowest recent sale and subtract. Coming up next: Just imagine how Washington can foul up health care!
I would have to say underwriting guidelines gone wild caused this mess.
This is real and is having a negative impact on our industry. We should all be on the roof tops yelling. Thanks for your post ... keep it up.
Amen! The appraisers are going totally the wrong direction. There's more to come, I understand. Can't wait to see what's new coming down the pipe tomorrow.