Loans Are About Rules/Regulations & Not About “Making Sense”/Logic

We have a very strong borrower whose loan is held up right now b/c the appraiser is unable to find rental data (for a rent survey) that is necessary for an FHA triplex appraisal.

We and the borrower (and the appraiser) are extremely frustrated b/c we all know market rents are much higher than available data indicate. Unfortunately, we have to comply with appraisal guidelines that require an appraiser to only correlate to actual and verifiable closed and signed leases. We can’t rely on Craigslist ads, pending deals, etc.

We also had two older, very qualified, borrowers recently who were extremely frustrated b/c they had to go through hell to comply with Fannie Mae’s paper-trail requirements. We all knew the borrowers presented no risk of default, but Fannie required the paper-trail anyway.

In the 1950s, all of the above borrowers would have received a loan from Jimmy Stewart’s Savings and Loan, no questions asked, b/c they are zero default risks. But today, it is often more about complying with rules and regulations than it is about “making sense.” This is an unfortunate reality of the 2015 lending environment.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646