I usually have to wait a month or so to blog about another stupid underwriter request, but here I find myself writing about a stupid underwriter request only a week after I last wrote about this very topic. I may start a new club, called the "Dumb A _ _ Club", and initiate people into the club who I believe ruin mortgage transactions for the consumer. It would have lots of member, they could charge dues, and they could throw parties and put up pictures of loan applications that get denied for dumb a _ _ reasons. Doesn't that sound like fun?
The people that write the mortgage rules at Fannie Mae and Freddie Mac can sponsor the club, and we'll have lots of underwriters, appraisers, administrators, and since the U.S. Government took over Fannie & Freddie, all the Congresspeople and Senators would be welcome as well.
Now back to the story about the dumb a _ _ situation I am complaining about. I had a longtime client who wanted to refinance. I helped them get their mortgage when they bought their home back in 1995, and have helped them with three refinances since then, not counting this latest one, all on the same property.
They have a lot of equity in their home, high credit scores, have been on the same jobs for over 15 years, and are stable and financially sound.
The appraiser, for some unknown reason, cited on the appraisal that the rear deck to the home had no handrails, and that was bad and the deck needed handrails. Keep in mind there have been four previous loans on this home, the deck has not physically changed at all from inception. No appraiser has asked for this before.
Now, I hear the skeptics out there already, saying, "well, shouldn't a deck have a handrail?" Sure, why not? But does it really materially affect the borrower's ability to repay the new mortgage, or does it really affect the property value a nickel, and does it affect the marketability of the property at all? No, is the answer on all counts, it affects nothing.
But, the Dumb A _ _ Club was ready to party, and the appraiser had this notation on the appraisal, and the underwriter, who had the power to ignore this silliness, upheld the appraiser's suggestion that a handrail be installed. The world is a safer place….
And, the appraiser had to come back out and reinspect the home, to make sure the work was done. The re-inspection fee was $115 on top of the $400 appraisal fee. Hmmm, imagine that. Would I be falsely suspicious to wonder aloud if the appraiser was trying to pad his fee? I see more and more appraisers calling for repairs, which require a final inspection, which requires an additional fee. Wait a minute…what the…!?!!
Would I be negative to wonder why the Dumb A _ _ underwriter could not use some common sense on a low loan-to-value, high credit score loan, and waive this condition? I find it astonishing, in this economy, that a loan that would save someone over $600 a month can get rejected over a few pieces of wood!
I report, you decide. Who belongs in the Dumb A _ _ Club in this story?!
**NOTE: no real profanity was used in this story, no animals were hurt during filming, and all minors worked no more than 60 hours a week during production.
Tags: strict underwriting, underwriting
