BrokerageIndustry News

Low appraisals kill sales in today’s market

Part 1 of 2: How to close deal when lender says 'no'
Published on Aug 27, 2007

(Read Part 2, "Private financing, rate buy-downs can rescue sale.") You have a property under contract, the buyer is preapproved, and the lender says, "Your buyer no longer qualifies for this loan." What do you do? There has been a quantum shift in the mortgage market. A new credit crunch is making it more difficult even for even "A+" borrowers to obtain loan approval. The days of lax underwriting are gone. For the first time in many years, agents are hearing "no" even when their buyers may be highly qualified. The issue is how to avoid being turned down in the first place, and secondly, if the lender does turn down your qualified borrower, what you can do to keep the transaction together. According to Lou Barnes in his July 27, 2007, Inman News column: "A 'credit crunch' is a lender strike, and a bad one is a common initiator of recession: not just raising rates for risky deals, but choking off credit altogether." Barnes reported in an earlier column that the regulators at Freddie ...

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