Appraisals, new mortgage rules expected to derail some 2014 sales

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SAN FRANCISCO — New mortgage rules that take effect in January will constrict mortgage availability and deny credit to some first-time homebuyers, Quicken Loans CEO Bill Emerson said in a panel discussion on lending at the National Association of Realtors’ annual conference.

The qualified mortgage, or ability-to-repay rule, requires “significant documentation from consumers to justify lenders’ underwriting decisions,” and lenders face strict penalties if a loan is made outside of the specific criteria, Emerson said.

Lenders have already tightened underwriting in recent years, and poor communications between real estate agents and appraisers can further complicate loan approvals, real estate agents and appraisers who attended another panel discussion on appraisal issues said.

John Anderson of Crystal, Minn.-based Twin Oaks Realty Inc. said 80 to 90 percent of agents he recently queried said appraisals were the top issue they face in 2014.

“I’ve personally had more appraisal problems in the past year than I’ve had in the past three decades,” Anderson said. Appraisals that don’t provide credible valuation supporting a proposed sales price can postpone closings or derail a sale altogether. Source: realtor.org