Here are a few quick updates/reminders.
APPRAISAL WAIVERS – NO MAS IN “FIRE AREAS” (Re-inspections too)
We have been getting far more appraisal or property inspection waivers (PIWs) over the last few months b/c Fannie, Freddie and lenders in general have relaxed their appraisal standards b/c of COVID and b/c more and more past appraisals are in now Fannie’s and Freddie’s database (a requirement for a PIW).
Unfortunately, underwriters are now requiring full appraisals in California’s fire areas even if Fannie’s and Freddie’s “automated approvals” grant a PIW (lenders understandably want to make sure the dwelling is still there).
RE-INSPECTIONS TOO: If an appraisal has already been done in a fire area, lenders are requiring re-inspections with photos.
Fortunately, Texas is much less flammable than California so this is not an issue with our Texas transactions.
TERMITE/PEST INSPECTIONS MUST BE UNDER 90 DAYS OLD
Whenever there is a transaction that requires clear inspection reports (most “non-as is” transactions), the inspection reports themselves must be under 90 days old, in most cases, at the time of close.
As a reminder, all VA transactions require clear pest reports, so this is more likely to be an issue with VA.
The issue with dated reports surfaces more often than not when sellers obtain the reports prior to the listing and then the property either sells slowly or there is a long escrow.
PRE-APPROVALS TAKE UP TO 3 HOURS – EASILY
This is just a quick reminder that pre-approvals can easily take three hours or more – particularly for self-employed borrowers with complex tax returns (very common in the Bay Area, much of LA, and Austin, TX).
I bring this up b/c agents and borrowers sometimes ask us for “rush pre-approvals” in the late afternoon or early evening, requiring our team members to stay well into the evening.
We very much appreciate every referral still and we don’t mind working hard and staying late for clients on occasion.
But, these rush pre-approvals can be pretty grinding for our staff and they have a surprisingly low conversion rate.
Worst of all though is that they are sometimes requested by buyers who just need our pre-approval letter for an offer they want to submit in the near future even though they have no intention of using us as a lender.
So once again, we are happy to accommodate our valued referral-partners when we can; we only ask that “rush pre-approvals” get requested with care and an understanding of what goes into them.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167