Another Side Of The Problem

This article came from http://www.msnbc.com/. http://www.msnbc.msn.com/id/22623144/from/ET/



The article talks about yet another problem that we have in the mortgage industry that is sometimes over looked. The appraised values of housing. Since the values of homes have declined, it is harder and harder to get a residential loan through lender underwriting. The article is originated in Minnesota, but here in Detroit we are getting hit just as hard with no end in site. The first place we start when helping a client refinace is to call the appraiser to see if we even have a chance to get the loan done.



And what makes it so bad of course, is that so many people now owe more than what their house is worth. The same lender that excepted an appraisal 2 years ago at $150,000 now is asking us to justify an appraisal for the same house at $120,000. Try telling someone that they have just lost thousands of dollars for doing nothing. And with a large number of adjustable rate mortgages out there, homeowners are not stuck between a rock and a hard place; they are being crushed between rock and a hard place.



And the same thing goes for selling a house. The article has this quote. "Values might have retreated more than the consumer might be willing to admit," said Tom Musil, director of the Shenehon Center for Real Estate at the University of St. Thomas." Which basically means that if you are trying to sell your house and you really want to sell it don't think about just reducing the price by $5K or $10K. Try more like $20K to $30K.



Who can afford to do that? But who can afford not to?


If you have any comments on this article, I would love to hear what you have to say! Feel free to comment below.

Thanks for reading!

Dan Tenchall
Great Lakes Mortgage Funding
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