A huge stumbling block I’ve come across in the past month or so is getting an appraisal that is acceptable to a lender. Lenders are being very skittish conservative about lending their money even though they receive billions of it from the Federal Government over the last few months. One way they seem to have found a way to hold onto this stimulus money to fluff their bottom line is by introducing stricter acceptable appraisal guidelines. Guidelines such as:
Comparable sales used to determine value can’t be older than 90 days
Comparable sales used to determine value can’t be farther than 0.50 miles in urban areas, 1.0 miles in suburban areas and 5.0 miles in rural areas.
And they are holding fast to these policies. Just a few months ago comparables up to 6 months old were acceptable. The distance from the subject property hasn’t changed much, if at all. What has changed though is that lenders will not allow exceptions even when noted by the appraiser in the “Analysis” and “Additional Comments” sections of the appraisal. Many times an appraiser has to go back more than 90 days or farther out than 1 mile from the subject property to find a like-property comparable. For instance, if you have a fairly new home in a neighborhood surrounded by older homes. Or your home is in a new neighborhood that hasn’t had many resales yet with which to determine value by.
What’s happening is that appraisers have had their hands tied on being able to accurately and honestly valuate your home. The banks are now dictating what your home is worth, not the free market.
If the new Home Valuation Code of Conduct (I love that name, like the government is looking after you) goes into effect on May 1, 2009 this situation will just get worse and worse.
Remember, the banks are in it for themselves. Independent brokers are in it for your benefit. We are small businessmen and depend on your business – and the business of your friends and family – to stay in business. Like any small business, if we don’t do right by you we don’t stay in business long – as seen with the huge exodus of loan officers and real estate agents from the industry over the past year. Those that were in it for the quick buck haven’t survived. Those that do this to help home buyers and home owners, and in turn help themselves and their family’s welfare, are still here.
So support your local independent broker. And keep your rights as a homeowner in the forefront by contacting your elected officials and weighing-in on issues that harm you as a homeowner like the new HVCC.
For Salt Lake City, UT today’s average mortgage rates are as follows:
30-year fixed: 5.125%
15-year fixed: 4.75%
Conforming Jumbo 30-year fixed: 5.75%
FHA 30-year fixed: 5.50%