Speaking of off topic…get this…I’m receiving an actual offer in a minute (just got the call) on a property that’s not for sale.

Do you think most agents would attend such a class? I use to do a monthly morning meeting in South King County called R TEAM (I creted it in 1992 and we just quit late last year, I’m trying to revive it thru AR) where we would educate on such topics. I would have about 10-20 agents a meeting from various offices…then it began to dwindle and… so that was when R TEAM was put on hold.

I was going to say I’m a bit off topic…but… this does kind of fit into “is everyone happy”. The more we (agent/lender) understand “the why” a client is moving/buying and their financing program, the odds are they should be more comfortable with the process.

Glad to hear I can tell a good use from a not so good use Where are the classes that teach agents what they really need to know in this business?

Agents can’t provide real value to their clients until the classes teach the right things. I just happen to have been in banking for 20 years before 1990 and have a sister who is an underwriter. We can’t depend on agents coming into the business with that kind of background. The lender really never gets as clear a picture of the buyer’s reality as the agent does. We spend so much more time with them and have many and varied conversations. Agents need to at least know how to spot a lending red flag.

Sometimes a buyer will find a house the day they meet the agent and call the lender the same day the buyer wants to make an offer. No agent should be writing an offer without a clear understanding of what will happen from day of offer to day of close, and shoving that whole responsibility onto the lender is not an effective safeguard for consumers.

Agent + Lender = 2 heads are better than one.

With regards to Bill comment 16, some lenders will offer second mortgages that go beyond 100% financing. And another possible product is 103-106% percent financing when closing costs are included. Both of these scenarios carry much higher interest rates.

I would rather see a seller contribute towards closing costs than have a buyer finance over 100%, personally. But hey, I don’t work for the seller!

Yes and no. It is common for refi appraisals to be wrong. So it is more than 100% based on what the property will really sell for, but not more than 100% based on the refi appraised value. Appraisals have been insanely inaccurate this year. Not sure why that is.

I’ve seen three different appraisers in a nine month period, value the same house at $850,000, $795,000 and $702,000 in an area that is not fluctuating in value or going down in value. Part of Seattle just really do not have “true comps” and the appraisers are using what they’ve got, and what they’ve got isn’t sufficient to give a true picture of value.

Seattle has so many unique homes. Appraising a three year old townhome in a development of 190 townhomes is going to be really accurate. Appraising a house in the City of Seattle that was built in 1920 , is usually going to have a much larger margin for error, especially those in view corridors. If the appraiser is using a view property to value a house without a view, his discount for no view is never going to be accurate.

The worst house in town will always over appraise and the best house in town will always under appraise and the run of a mill, dime a dozen houses will appraise pretty much on target.

If the refi is 80% of appraised value, that does not mean there is 20% equity and it could in fact be financed at 110% of what it would really sell for. That’s how people get upside down. The refi appraisal was much higher than what the home would really sell for.

Hope that explains it better.

That is why I DO think it is the agent’s business to assist in the loan process.

Good examples of stretching and stated that I have had:

Very busy woman who owned three day care centers. Was selling her big house and buying a townhome. No question but that she could afford the payment. She didn’t want to put money down on the townhome, because she needed more cash flow for the businesses. She didn’t want to hand over all of her accounting records for the last two to three years and just wanted a fast loan approval. She was willing to pay the extra 1/8 to 1/4 point to have a clean, fast approval with no work on her part sorting through bank statements, etc…She went “stated income”.

Young fellow, last year of medical internship. Would be making much more money than today, in future years. Had a second income partner who would be living in the new house, but they were not married yet and he was buying it in his name only. So his current income did not reflect a true picture of his ability to pay either today, or long term. He bought more than his current income would permit and went “no income verification”.

No income verification and stated income options have very good real life purposes for certain people. They are not a means for people to get a bigger and better house, who truly cannot afford it. It is not a way to push the back end out to 75% of gross, unless there is substantial additional, undocumentable income.

Another good example is “trailing spouse” income. Lender won’t count it, but not likely it isn’t going to be coming. Wife is just waiting until she gets to the other end to secure a job. Difficult to secure both husband’s and wife’s job at the same time, before the relocation to the new state.

Many, many really good reasons to have no income verification options. Problem has been that lending professionals and some less than savvy buyers have been applying these options in an abusive fashion. The answer isn’t to get rid of the options, the answer is that someone has to make sure that the right people are using them.

I haven’t seen any foreclosure sellers, so I can’t say. The only ones I have seen upside down are ones that borrowed against their equity, once or even twice with a refinance, after they purchased the property. So the HAD equity, they just spent it all.

No doc loans (no income, no employment or assets verified) are becoming more popular as well, since the pricing is usually not much more than a “stated”. It does take better credit to qualify for this type of program.