I. This is a reminder that lenders (rather than sellers) can pay for temporary buydowns, including 2-1 buydowns.
We, in fact, sent out finance flyers for 400 different properties this week alone, with our Lender-Paid 2-1 buydown offering.
This blog – SELLER-Paid 2-1 Buydowns vs. LENDER-Paid 2-1 Buydowns – What’s The Difference? – explains the difference between “lender-paid” and “seller-paid” buydowns.
II. 3 Appraisal Types Agents Should Know
- Standard Appraisal. Nothing new here. These require a full inspection, a property sketch, comparable sales, and a full write-up. They cost about $750 on average, although JVM usually pays and absorbs rush fees to get them back sooner.
- Property Inspection Waiver (PIW)/Appraisal Waiver. We get more of these than ever now for properties under $1 million. Properties over $1 million don’t qualify. But properties under $1 million with previous appraisals in Fannie Mae’s or Freddie Mac’s database often qualify for PIWs, depending on the strength of the borrowers. There is no cost, obviously. Warning: Lenders sometimes lose “PIW” status (and have to order full appraisals at the last minute) when purchase prices, credits, or loan terms change.
- Property Data Collection (PDC). This is why I am blogging about appraisals, as we are now seeing a lot more of these. PDCs require no value estimate, but they do require inspections and photos.
Two Warnings: (1) Even though there is no risk of a low valuation, there is a risk of condition issues getting exposed by the photos; (2) These sometimes take LONGER than standard appraisals, as lenders can often find appraisers who will return full reports much faster than PDC inspectors will return a PDC. This will change though as lenders find more PDC inspectors.
III. Lenders Can’t Charge for Credit Repair
Years ago, the CFPB imposed rules that made it impossible for lenders to charge borrowers for credit repair. I am blogging about it because I saw lenders lamenting the stupidity of this rule on X recently, as it is one more example of heavy-handed regulations hurting the most vulnerable the most.
To be sure, some lenders overcharged for credit or credit repair in general. But most did not.
Before the “no charge” rule was imposed, thousands of lenders and loan officers specialized in credit repair for borrowers with poor credit.
Now, very few lenders do because they don’t want to risk eating high credit repair fees (often well over $500 or more). And this only hurts the very borrowers who most need the help.
