Home Closing Process - What Questions to Ask Your Agent Part II

If you are a buyer, these are questions you should be asking your agent:

*What if the seller decides not to sell and a purchase contract is already in force?

*What if the termite, home, roof or other inspections turn up more work than the seller anticipated and the expense for these repairs is much great than expected?

*What if the home suffers major damage in an earthquake, flood, fire or other act of Nature?

*What if liens or encumbrances are discovered which have been placed against the property?  For example, if the seller was handed a large tax lien against the property that had to be paid at or before the closing and the Seller would not have enough money to purchase their new home.  What could happen?

*What if the buyer changes his or her mind at the last minute and decides not to close the transaction for no apparent reason?

 Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Home Closing Process - What Questions to Ask Your Agent Part I

If you are a seller, these are questions you should be asking your agent during the sale process:
*What if the appraisal for the lender who is making the loan for the buyer comes in lower than the sales price and the loan amount is reduced?


*What if, even after an appeal, the lender refuses to raise the loan amount to the amount that the buyer needs to close the transaction?

*What if the sales price is altered due to a low appraisal?  Can the seller negotiate fees that they have agreed to pay such as repairs, inspections, loan fees or commissions?


*What if a buyer though they were pre-qualified does not ultimately qualify for the loan?


*What if the buyer tries to continue to negotiate throughout the closing process?


*What if the buyer, the buyer's agent, the lender, the appraiser, the different inspectors or the repair people are not doing their jobs within the time frames which were projected at the onset of closing and it now appears that these actions are going to delay the closing?


*What if a buyer has a significant change in his or her life before the closing (loses job, divorce or bankruptcy)?

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com

Fannie Mae Conventional Loans are now requiring a 2nd Credit Report

Lenders must now obtain a 2nd credit report, no earlier than 7 days prior to funding, on all conventional loans.  Any new credit inquiries must be explained, and any new credit obligations must be re-underwritten with those debts included in the qualifying ratios.

Jay Starks @ Bell Mortgage states they will not be required to obtain a new credit score and they will not be charging the borrower for the additional credit report at this time.

Jay further comments that he would not be surprised to see FHA and VA follow this path. And, it is possible that investors may decide this is a great idea and require lenders to do the same on all loan files regardless of what the agencies mandate.

Linda Shank Broker Owner Linda Shank and Company is a 32 year real estate veteran in Phoenix's Southeast Valley.  Contact her at www.ISellAZSunshine.com 

Buyers Beware of a 2nd Credit Report done prior to Closing your Loan

This just in from Jay Starks @ Bell Mortgage:

FNMA and Freddie Mac are on the verge of requiring lenders to pull a 2nd credit report just prior to funding.  When they do, we expect all of our secondary market investors to do the same, and they will probably require us to do so on government loans as well as conventional files.  The ramifications of this are enormous:

 

1)  Small FICO score changes due to something as simple as a slightly higher credit card balance could change a customer's interest rate, or cause the loan to be denied, at the last minute.

 

2)  New debts or obligations could cause a customer to no longer qualify.

 

3)  Recently recorded judgments or collection accounts that were not on the original report could derail a transaction just before funding.

 

 

I know that many of you counsel your clients regarding their use of credit while they are shopping for homes or while they are in escrow, but it will be more important than ever going forward that we all work together to remind them of what can happen.

 

No more moving back in with Mom and living on charge cards while you save up your down payment!

 

FHA Requires Buyer and Seller Signatures to be Live---Not Computerized

In the age of technology, even a signature on a document can be added by a computer program.  HOWEVER, FHA along with many of the large investors requires that the signatures of both buyers and sellers on all initial and final documents such as the contract and final settlement statement be "LIVE" or "WET".  Please keep this requirement in mind, especially when you are dealing with corporate sellers in the case of REO properties.  If you know ahead of time that a live signature is needed, it can help prevent delays to the closing process.

 Information courtesy of Sherri Buttler, Sun American Mortgage, 480-467-1088, Mesa Arizona.