A Kick in the Nuts with Appraisals.... Realtors and Consumers Take Note!
Mr. Bettag presents some crucial information and nice commentary with this post. Realtors & Consumers alike, please read the following very closely. In a seemingly everchanging atmosphere, it is crucial to arm yourself with trusted outlets to ensure you are abreast of all the happenings around you.
Via Larry Bettag - Cherry Creek Mortgage:
Andrew Coumo threatened action against Fannie Mae and Freddie Mac making claims that Fannie Mae and Freddie Mac failed in providing proper oversight with appraisals. It's argued that Fannie Mae dropped the ball as there was not a proper degree of separation when ordering appraisals. Needless to say, a new rule is being implemented to change the way that appraisals are ordered.
TIMEOUT COMMENTARY: Coumo has decided to punish 98% of the consumers because 2% of the consumers were really hurt by bad appraisals, straw borrowers and the lot. Don't get me wrong, the mortgage industry didn't act harshly enough or quickly enough when fraud was perpetrated. However, 98% of the consumers will be hurt by this new Fannie Mae rule. Why????? More to come...see below.
THE ACTION? What is the result? The result is that no one, and I mean NO ONE in production will be allowed to order an appraisal, influence anything on an appraisal, or even at the minimum talk to an appraiser regarding any file that has been originated by anyone in production.
TIMEOUT COMMENTARY, PART II: Here's what really kills the consumer. A client contacts me and says I'm thinking about refinancing. I think my house is worth about $300,000. I have a mortgage of $240,000 and I'd like to take out another $20,000 to pay down some bills. "Larry, do you think that this is possible?" Normally, I'd call whatever appraisal company and say, Hey Kevin, the property at 123 south main street is considering refinancing. The client believes that his property is about $300,000 in value. Do you think the client is right on or is he smoking crack?" You'll notice that I'm not influencing the appraiser, but rather, INQUIRING.
Andrew Coumo believe that it is an undue influence....and apparently Fannie agree. He thinks that the conversation should go a little more along these lines:
"Larry, I'm thinking about refinancing, blah, blah, blah (same story as above). I NOW SAY...listen, I'm clueless, Fannie Mae has changed it's guidelines. It'll cost you $350 for you to find out what your house is worth....I know it sucks, but it hey, that's your government at work for you....YOU IN????"
Now, of course, I'll use my good looks, charm and tact to make it less of a bombshell response than that, but hey, that's the way it'll be after May 1, 2009. Now it's now like ex-Illinois Governor Rod Blagojevich....you now have to pay to play. No free peaks. I wasn't influencing...I wanted good facts to take back to the client. Rat bastards! Sorry, but it really rags my goo. But alas....I digress again.
The new rule?????? Someone independent of production needs to order the appraisal. So what does that mean exactly? I can hire a national appraisal firm to go ahead and be in charge of ordering the appraisal. Here's the problem with this one. They have appraisers on staff of whom we've blacklisted because of unethical practices. Yeah...you got it. You fire Larry Bettag from ordering an appraisal from an appraiser with integrity in order to ensure that some jamoke from some national company picks an appraiser in my backyard that may or may not be ethical (I'm sure that some of the appraisers are kissing butt so that a lot of the business goes directly to them). Yeah...that's real fair. Or what about the dude who has had 3 fines and 2 suspensions in the last 3 years and who really sucks at appraising, but is on this national appraisal list. Hello??????????? What about the appraiser who schmoozes the national appraisal ordering entity so that he is ensured a minimum amount of referalls. A couple of beers = a couple of referrals.
Another option?????? Our company hires one or two people to work out of the corporate office who's sole duty will be to be the only interface between the appraiser and the mortgage company. Now that I've received the appraisal, I see that they forgot the comp on 246 North Main Street. Can I call the appraisal company to discuss this?????? Abso-frigging-lutely not!!!! Not one bit. Plus, now the cost of doing a loan is higher for the consumer as the mortgage company now budgets extra staff for appraisal ordering. Yeah Cuomo...it's great for the consumer.
I'm sorry Mr. Consumer, but because our industry did a bad job policing itself, 98% of the consumers will now be hosed. What's the rule on creating rules?????? Rules are made for those who don't want to follow rules or get along and do the right thing. Thanks Mr. Jerk fraud loan originator....you need to be in prison for fraud, but now I can't serve my clients as well because of the jerk moves that you've done. Soooooooooo stupid.
But wait...they forgot the other comp that a realtor wanted me to provide. Sorry Mrs. Realtor, no can do. I can't communicate with the appraiser, nor can you. Pretty rough huh?
WHAT'S THE MORAL OF THE STORY??????
IF YOU'RE THINKING OF REFINANCING OR BUYING....DO IT NOW! It'll cost you less now than it will in the future. Change is a great thing. But as we all know, change for the sake of change alone isn't something good. While I can't fight the rule, I don't have to like the rule.
1 comment • Jason Sardi, Mortgage Banker • February 20 2009 10:06AMWhen You Find The "Almost" Perfect House, But Want To Make It Home.
This should lead it off quite nicely:)
Back in my early days of lending, I recall quite vividly the very first Rehab Loan I did. While I did some legwork in actually knowing the ropes of that particular product before advertising the bejesus out of a very niche loan, I still was caught like a reindeer in some oncoming car's speeding headlights when trying to get them closed in a streamlined sort of fashion. And then, I had it mastered. As my particular luck would have it, most of those programs disappeared shortly thereafter.
The echoes in the back of my head rang of a long-lost product I had only heard about and most of what I heard were borderline horror stories. The FHA 203(K) loan reared its mysterious head and stared me in my wide-eyed glance. I gotta admit, there was major hesitation on my part in even wanting to get involved in such a misunderstood product. I knew little about it and wanted to concentrate more on the Conventional sort of stuff that I grew up with in the industry... at least at that point. Hey, of course I want to corner the market, but not at the risk of looking like an incompetent SOB at the end of the day.
Then, I encountered experts in that very product. I figured, let's roll repair.
After doing more homework than my combined High School & College Education would vouch that I did back in the day, I chose to go after a market that just may make a dent in not only enhancing the housing market... but the very neighborhoods we live in.
This is just a taste of the FHA 203(K) Renovation Loan!
- Add a deck or porch, makes for one heck of a Summertime BBQ.
- Upgrade the electrical system and avoid reading overdue utility bills under candlelight.
- Modernize the kitchen and watch the The Food Channel in a comparable stadium.
- Replace a furnace and heck, it's a furnace. You really don't want that entity breaking down anytime soon!
- Paint the exterior and/or interior. Yours could be the only lavender house in the neighborhood:)
- Install new carpeting. There's nothing like getting rid of stained residue from a German Shepard you never owned.
- Remodel a bathroom. Hey, might as well let loose of your naked body in comfortable surroundings!
- Replace roofing and/or siding. There were 58 mile per hour winds in Pennsylvania today, that stuff may come in handy.
- Refinish wood floors. That's a big selling point for yours truly. I adore wood floors and have an aggressive amount of ShamWow merchandise to prove it:)
Program Features:
- Low down payment
- Buy and remodel a home with one mortgage! You can finance the purchase plus the cost of the improvements with one monthly mortgage payment.
- At least $5,000 in repairs needed to qualify for the 203(K) Loan.
- They can be used for owner occupied 1-4 unit family dwellings.
- Closing takes place before the improvements/repairs are made.
- Money for the repairs and renovations is held in an escrow account and paid out after each phase of work is completed, inspected and approved.
- By the way, they are fixed rates!
Consider this the teaser post to the taste buds of home renovation lending. Yup, I'm your proverbial appetizer.
Jason Sardi
Mortgage Consultant
1-866-262-8720 ext. 229
Located at our Allentown, Pennsylvania office. Pennsylvania Based Mortgage Banker/Broker whose area of service include PA, NJ, NY, CT, DE, MD, VA, SC, FL, MI and IN.
73 comments • Jason Sardi, Mortgage Banker • February 12 2009 10:29PMContent © 2009 'Frequent Contributors'. Design © 2009 ActiveRain Corp.
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