Reverse Mortgage Borrowers Not Getting Lift From Appraisals
Two days ago I heard from a would-be client, who quickly became a never-would-be client. I say this because I can practically guarantee that I wont be contacted by him again.
He began by flattering my marketing abilities. Once I was buttered up he opened the door to his true inquiry: How can choosing you instead of another lender, get me the largest cash sum possible from my house?
The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.
So he asks me to use an appraiser that really does a "good job". Of course this is code for an appraiser who fudges up his numbers to make the loan or transaction work.
The point being for him, a reverse mortgage lender will lend him a greater amount of money if his value comes in higher.
Many seniors have a desire to pay off their traditional mortgage using the reverse mortgage. It's the number 1 reason seniors are looking at the reverse. But, with waning values, it can be precarious.
Yet the lender can't at all times loan an adequate amount to fulfill this wish if the appraisal returns too low. So the poor borrower has to maintain payment on the regular loan until his home value increases enough to give it another shot.
Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.
If you are a strict rule following appraiser, the above statement might tick you off a bit, but come on, it is general knowledge this practice was occurring.
Presently everyone in the housing industry is being held responsible for the mortgage debacle, appraisers too. A closer eye is being kept on them than previously.
With the frequency of appraisal reviews taking place, appraisers could possibly lose their license if they don't do things by the book.
So, that is what I told this guy. I haven't heard from him since. I told him other companies would tell him how their appraiser will definitely get him the greatest value.
They all say that. In the end only one is right. I'd prefer to give an honest answer and lose the business.
He began by flattering my marketing abilities. Once I was buttered up he opened the door to his true inquiry: How can choosing you instead of another lender, get me the largest cash sum possible from my house?
The truth is that nothing can be done differently. There is a formula, used by all lenders of reverse mortgages, to determine how much cash can be taken out of a mortgage.
So he asks me to use an appraiser that really does a "good job". Of course this is code for an appraiser who fudges up his numbers to make the loan or transaction work.
The point being for him, a reverse mortgage lender will lend him a greater amount of money if his value comes in higher.
Many seniors have a desire to pay off their traditional mortgage using the reverse mortgage. It's the number 1 reason seniors are looking at the reverse. But, with waning values, it can be precarious.
Yet the lender can't at all times loan an adequate amount to fulfill this wish if the appraisal returns too low. So the poor borrower has to maintain payment on the regular loan until his home value increases enough to give it another shot.
Appraisers are in a tough spot right now. Yes, they had the luxury for many years to trump up appraisals.
If you are a strict rule following appraiser, the above statement might tick you off a bit, but come on, it is general knowledge this practice was occurring.
Presently everyone in the housing industry is being held responsible for the mortgage debacle, appraisers too. A closer eye is being kept on them than previously.
With the frequency of appraisal reviews taking place, appraisers could possibly lose their license if they don't do things by the book.
So, that is what I told this guy. I haven't heard from him since. I told him other companies would tell him how their appraiser will definitely get him the greatest value.
They all say that. In the end only one is right. I'd prefer to give an honest answer and lose the business.
posted by Debt Consolidation Loan at
6:08 AM
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