DO YOU KNOW WHAT QUESTIONS TO ASK WHEN YOU’RE SHOPPING FOR A MORTGAGE? MOST ASHEVILLE LENDERS WILL BE PRETTY CLOSE TO EACH OTHER IN RATES AND FEES. RATES MEAN NOTHING IF YOUR LOAN IS NOT APPROVED OR CAN’T CLOSE ON TIME.
Today, with all the uncertainty and strict loan guidelines, you really need to work with an Asheville Lender who can get your loan approved and closed quickly and efficiently. But how do you find such a lender? Here are 7 Questions to ask a prospective lender.
1. Are you lending your own money? Alpha owns the process from application through closing and funding. We lend our own money, so we make the decision to lend.
2. How many people will be involved in the loan process? For Alpha, it’s the loan officer, processor, and underwriter. That’s it. You will always know what is happening. We are ACCOUNTABLE.
3. Who will do the appraisal and how will they be assigned? Alpha still uses experienced, local appraisers whom we assign on a rotational basis. Many other Asheville lenders use third-party appraisal management companies that put the appraisal out to bid; in many cases, the appraiser with the lowest bid, regardless of experience or local knowledge, get the assignment.
4. How fast can you close? Alpha owns the loan process, so we can adjust priorities if necessary. This is particularly important when purchasing short sales where the time frame to close is short after the servicer of the existing loan agrees to the short sale.
5. Can your loan officer work directly with underwriters? Alpha has in-house underwriters who answer questions and resolve issues instead of just declining loans. Every loan has individual characteristics that DESERVE PERSONAL ATTENTION and understanding from everyone involved. Underwriting should not be an impersonal machine.
6. Who prepares the closing package and arranges funding? Every Alpha loan processor closes her own files. Many other Asheville lenders have centralized closing departments who are unfamiliar with the file and who have multiple conflicting priorities with getting packages out. If your processor is your closer, then she has a commitment to get that file closed. It’s her job. SHE IS ACCOUNTABLE.
7. How many days in advance do you typically have the package to the settlement attorney? Alpha strives to get the package out at least 48 hours prior to closing. Many other Asheville lenders end up sending packages at the last minute which leads to a lot of stress. Settlement attorneys LOVE Alpha because we make their jobs easy. They have a single point of contact (the processor) to get the package, approve the HUD, and resolve any last minute issues.
Today, it's all about EXECUTION AND ACCOUNTABILITY. This may be one of the largest financial decisions you will ever make, so you need to find an Asheville Lender who will put your needs first and get things done fast.
Click here to request a checklist of the 7 Questions to Ask Your Asheville Lender. And if you'd like to share this information with a friend as a video, click on the picture below:
Here's what I like best about living in downtown Asheville, North Carolina:
Shopping in quirky, locally owned stores. All along Lexington Avenue and Broadway street are great local shops offering, among other things: wigs, gifts, household decorating and furniture items, used books, high-end and inexpensive clothing, a real general store, groceries, natural foods, handmade art, and so much more. It's not a mall with mega-chainstores, but a real unique downtown shopping experience. Asheville store owners encourage people to buy local, and with so much to choose from, you won't be disappointed.
Dining on the foods of many nations, just steps from my home. Living downtown means you never have to cook, ever again. Within a 5 block radius of Pack Square, the heart of the downtown, you can dine on Japanese, Indian, Chinese, French, Caribbean/South American, Cuban, Thai, Italian, Cajun, Mexican, Southern, Continental, New American. I'm sure I've left off a few cuisines here but you get the idea.
Drinking locally brewed beer. Asheville is second only to Portland, Oregon, in the number of microbreweries per capita. Several local bars and restaurants serve dozens of beers on tap, and three new brewpubs have opened within the last year, all in downtown Asheville. There's also a great specialty beer store on Broadway Street that specializes in high-gravity brews and has a tasting every Thursday evening.
Sharing coffee and dessert. It's not quite the large rainy city in the Northwest, but Asheville has numerous independent coffee shops and delectable locally baked desserts. For chocolate lovers, we have at least two specialty chocolatiers; pastry and cookie mavens can choose from several bakeries (one specializing in dog cookies!), and some outdoor cafes for people watching with your coffee. Ice cream fans have a couple of tasty options too. Sitting outside on a sunny day in Pack Square sipping something nice and sharing a dessert with someone special is pretty unbeatable.
Those of us who living downtown can find both new and historic condos, from the spartan to the luxurious, city and mountain views, small and large spaces, traditional and modern floor plans, high and low rise buildings. In short, if you can't find a condo that fits your needs, you're not looking in downtown Asheville!
Recent guidelines from Washington have forced a change to the way that loan originators will disclose closing costs for all borrowers. The purpose of the new Good Faith Estimate is to level the playing field for borrowers comparing loans to be able to make apples to apples comparisons for loan scenarios.
In essence, HUD is working to bring all lenders up to the same standard of excellence in reporting closing costs that good lenders have always adhered to, estimating realistic fees that a borrower should expect to pay at closing with no last minute surprises.
Below are some important points to know:
If anyone you know is about to get a mortgage, please share this with them.
This blog entry is more for sellers and realtors, but the issues are important for everyone. Buyers, too, should seek to work with lending sources who use local, experienced appraisers.
Although on its face, having a low appraisal may seem to benefit buyers, this is a short term benefit. Someday, perhaps sooner than expected, buyers will become sellers, and then the appraisal issue suddenly affects them in the other direction. So it behooves buyers also to have accurate appraisals.
The key is to have an accurate appraisal done by someone who knows the locale and the market. An appraisal fundamentally is still an informed opinion of value, but its quality depends greatly on the market knowledge and expertise of the appraiser.
Here are some things you may be able to do mitigate HVCC issues:
1. Get to know some good lenders that don't use AMCs. Smaller lenders can comply with HVCC by having a separate appraisal department that has no financial connection to the loan process. This rules out working with most big banks and mortgage brokers, but if you want local, experienced appraisers who get paid full fees, then this could make a difference.
2. If you're the listing agent, take the lockbox off the house and force the appraiser to contact you to arrange access. Prepare a comprehensive packet of information about the house (upgrades, amenities, and architect's floor plans are very useful, for example), information about any FSBO's in the neighborhood, recent comps, any good pending contracts that you know about. Don't discuss valuation, but there's nothing wrong with giving the appraiser information. which they can use or discard at their discretion. At least you tried.
3. If you're the buyer's agent, persuade the listing agent to do #2 but prepare the information packet for him or her. Better still, see if you can be the contact person for the appraiser and deliver the packet in person.
4. Find out if your lending source will allow you to reject the assigned appraiser. If you can ensure the appraiser contacts the realtor, and the realtor finds out the appraiser is not an expert in the local market, tell them you don't want them to come and get your borrower to tell the lender to pick another. You referred them to this lender, didn't you? It might slow down the process a bit, but better that than have the deal die.
5. Prepare your seller for the appraisal as if it were a showing, only more so. If anything, the house needs to show even better than it did for a potential buyer. Even good appraisers are affected by subjective criteria. A nice, neat, clean, quiet house, with no distractions, pets, kids, or owners around will allow the appraiser to get the inspection done more efficiently. Leave a small edible treat for the appraiser. Your packet will tell the rest of the story on the house. Keep the owners away and get them to make any obvious minor repairs if possible. You know how to stage houses, right?
Good luck!
Once upon a time, we lived in a perfect world where everyone knew everyone and things went smoothly with the appraisal process. Your loan officer (mortgage broker or mortgage banker) had a list of appraisers that she knew understood the market, and ordered appraisals directly. In a perfect world, loan officers and appraisers never argued about property values, and never collaborated to inflate values to commit loan fraud. Loan officers never put pressure on appraisers to increase values so they could fit a loan into the right ratios, and appraisers never deliberately ignored good comps that didn't support the property value. Since the borrower relied on the integrity of the process, they never got taken advantage of and didn't end up with property that was not worth what they paid and lenders didn't get loans on property that was worthless.
YEAH, RIGHT!
We really never lived in that world, and the Attorney General of the State of New York went after Fannie and Freddie and obtained a consent decree that later became the Home Valuation Code of Conduct (HVCC).
In sum, HVCC prevents anyone with a direct financial stake in the loan origination process from having any communication with the appraiser until the appraisal has been submitted for review. Other than sending the appraiser a sales contract, no contact is permitted until underwriting, at which point the underwriter may request further information, clarification, or corrections.
Only lenders may order appraisals now (cutting mortgage brokers off completely from the appraisal process). Mortgage bankers who work directly for lenders must rely on their lender's compliance with HVCC. Mortgage brokers are completely at the mercy of the lenders they use.
To comply, lenders have essentially two approaches depending on their size and business operations. Either they contract the appraisal ordering process out to a third party, known as an appraisal management company (AMC) or they set up a separate department within their operation that orders appraisals but that has no direct financial stake in the loan approval process.
AMCs contract with appraisers to do the work, and have been getting a reputation for not paying appraisers as much as they would otherwise earn. For example, an AMC might charge the lender $500 for an appraisal, then offer to pay the appraiser $250 in a market where most appraisers normally charge $350.
The net result is what you'd expect: many local appraisers won't take the assignments, so the AMC ends up scrounging up an appraiser from someplace else who is hungry enough to work for less. Now you have an appraiser coming in from outside the area, or who is inexperienced. You won't have to look hard for appraisal horror stories these days, and this is one of the root causes.
I'm not saying that all appraisers sent by an AMC are bad, but the likelihood of getting someone who doesn't have the best possible market knowledge for your area increases substantially with AMCs.
The only time an AMC can be useful is if one is doing a deal outside one's own local area, but this, too, is a two-edged sword. When a non-local lender is involved, such as a hometown bank with a relocating or second home buyer, then an AMC likely will be used order the appraisal, with some risk that the assigned appraiser will not know the market.
That is why realtors try to get buyers to use local lenders. However, if the local lender's company now uses an AMC, you could still have a problem.
If your local mortgage banker works for a lender that has its own appraisal ordering department, then they will have a roster of local appraisers among whom assignments get rotated. In most cases, to keep things simple, there will be two or three firms that will be used consistently. These appraisers will be carefully chosen for their expertise, and you can count on the fact that they know the local market.
So, when you next shop for a mortgage, you must ask the question, "Who is ordering the appraisal?" It could make a big difference in your outcome.
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As a CMPS(r), I help people create and preserve wealth by integrating their mortgage with their overall financial goals.
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