“Switching Loan Products in the Middle of a Transaction”

Sometimes a mortgage doesn’t work out the way it’s supposed to. So, is there a fix, a solution that can still work? Amy called my office yesterday morning. She had just been denied by her bank for an FHA mortgage.

The problem, the appraisal indicated a number of issue and repairs that were required and they wouldn’t do the mortgage. 

After talking her off the cliff, I asked if she could get me a copy of the appraisal. She told me that it was bank policy not to share the appraisal. The reason she was told, she didn’t actually pay for it, she merely paid an application fee. To me, she paid for the appraisal, but that is another story. 

I told her, I would see what I could do about getting a copy. I asked her if she had gotten a home inspection, she said yes, but that her purchase agreement indicated that the property was being purchased “AS IS”. Love these words. The problem with this bank, they don’t do FHA 203 K loans. We could have just changed loan products, gotten a bid for the necessary repairs and include the repairs as part of the loan. We could use the same appraisal and move forward with the mortgage process. 

I did a conference call with Amy and the Realtor to find out if we could get enough time to complete the mortgage process. The Realtor communicated back with me later in the day, that an extension can be gotten. I gave Amy a referral for a contractor that understands this 203K process and she has already made arrangements to get him into the home. 

I contacted the bank and after being transferred to a number of different people spoke to the underwriter that had worked on Amy’s file and am making arrangements to have the appraisal transferred into our name, but in the meantime I was able to get a copy.

I sent it to Amy, the Realtor and the contractor, so that everyone can be on the same page. I’ll get the application done and she will be well on her way to owning the home she wants.