So do you want the good news or the bad news this week? It seems that every time something positive happens in the business, we have a new hurdle or challenge to handle as well. This week is no different.
First here is the good news. Several large national lenders have rolled out their guidelines to refinance consumers impacted by a drop in their homes value. The “Obama Plan” allows folks who have an eligible mortgage to secure financing when they, to date, have not been able to take advantage of the low rates out there today.
To be eligible, your mortgage should not currently have PMI and you have not likely been able to refinance due to a drop in value. Though previously you would not be able to refinance and because your loan would now require PMI, you will not have to add it through the “Obama Plan”. This program has quite a few hoops to jump to take advantage of it so expect a 60 day rate lock and it’s likely to be a little more challenging than your last refinance. But it is available and the professionals at America’s Mortgage Choice are ready to work to help you get the new mortgage and relief you deserve.
Now, here is the bad news part of the story. On May 1st, mortgage brokers will not be able to order an appraisal of your property from an appraiser that they have a relationship with. Effective May 1, all appraisals must be ordered “blind”. Central repositories are being set up and will take your appraisal order and generate the order randomly to a licensed appraiser.
This is being done to avoid pressure being put upon appraisers to “hit the number”. However, the consumer impact could backfire. Today, appraisers tell brokers up front to “forget it” any time the value of a home makes it unlikely that a loan would get approved. This courtesy saves the consumer $300 bucks. Now appraisals will likely be closer to $400 and there is no way to gauge the risk the consumer is taking. The appraisals are likely also take longer to deliver. So you could wait six weeks (versus one) for an appraisal that could kill your home purchase or refinance.
So in a nutshell, appraisals will take longer, be more expensive and there is going to be less communication between the consumer and the appraiser about the prudence of even trying to do the deal. The message is clear, if the numbers make sense to refinance, do it right away and avoid more expense and delays after May 1.
