Changes to the lending process…
On Friday, May 1, 2009 the new Home Value Code of Conduct Plan will go into effect. How will this impact your purchase you may ask… Well, see below.
1. Appraisals will have to be ordered through a 3rd party vendor designated by the lender we send the loan to.
2. The appraisal has to be paid for at the time of ordering.
3. We will not know who the appraiser is and they will not know that we are the broker or loan officer. We, the loan officer and anybody within our company, cannot have any contact with the appraiser at any time. If there are issues with the appraisal, they have to be addressed through the third party vendor that ordered the appraisal.
4. The borrower must receive a copy of the appraisal 3 business days prior to signing Closing loan documents, via e-mail or 5 days prior if the appraisal has to be mailed. The lenders will not allow the borrower to sign until this time has passed.
5. Some appraisals may not be transferred between lenders. This is determined by each individual lender as to whether or not they will transfer and/or whether or not they will accept a transferred appraisal.
6. Turn times from the time of ordering the appraisal to delivery can be up to 5 days, unless there is a problem with gaining access to the house.
All in all it’s not a terribly life altering adjustment. The primary reason behind this has to be the whole mortgage market meltdown and the fact that previously lenders had direct contact with appraisers and in some cases were able to influence appraised value which lead to inflated valuations. So long as this process is well streamlined it will hopefully not prove to be a major roadblock to the timely execution of purchase and sales. It is unfortunate that this will go live at the busiest time of year, it could very well be a trial by fire. If you’re planning on writing an offer anytime in may you may be well advised to add an extra week or so to your escrow, just to be safe.
Thank you to Sara Solis with Pacific Residential Mortgage for putting this synopsis together.
