We got another “rush purchase” yesterday, involving a non-owner fourplex. The purchase was “as is”, but the deal died at B of A at the 11th hour because a document with a termite report reference made its way by accident to the underwriter. The underwriter promptly called for the report; there was too much repair work to be done; and the deal died at B of A (REO seller, of course, said “no way” to the work).
Now we have to close in 10 days to save the deal, and we will.
There are two lessons from the B of A deal: First – ALWAYS scrub ALL “AS IS” files for all references to any reports/inspections. Our entire staff knows to do this.
The second lesson is more interesting: The borrower was dealing with a rookie loan officer at B of A who quoted and allegedly “locked” in a rate that was obviously NOT a rate associated with an Investment Property fourplex. The borrower was clearly quoted an “owner occupied” rate that was so low that B of A might have been looking for any reason NOT to do the deal.
The market is very “efficient” and competitive. While ultra-efficient market leaders like us may be 1/4 percent lower than most banks, it is highly unlikely anybody will ever beat anybody else by more than 1/2 percent in rate. If a large bank (usually not that competitive) is quoting a rate significantly lower than everyone else, something is probably wrong, and it is likely that something will blow up at prior to close of escrow.
As the saying goes – if something is too good to be true, it probably is.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 1197176, NMLS# 310167