That was the headline in the business section of Tucson’s Arizona Daily Star. A bar chart shows the MLS data. It supports the headline.
The National Association of Realtors sees pending sales as a leading indicator of housing market activity. Christie Smythe (not a REALTOR®) quotes an NAR spokesperson, Walter Molony, as saying that the “discrepancy might be due to a higher proportion of new home sales.”
What she’s talking about is fallout from buyers who cannot perform.
I have a different take on the reason sales are falling through. See if this resonates with you.
The lenders whose money we broker are running scared, as values flatten and diminish in many markets. Their solution is to do what World Savings has done for years–offer a particular LTV on a specific product, but knock down the appraisal submitted with the package if the LTV bumps the limit.
I’m seeing this across the board. Suntrust, Countrywide, Wells Fargo, and other national players will issue a conditional loan approval requiring a review of the appraisal from a list of appraisers they provide. The reviewing appraiser comes back with a value lower than the purchase price, and the deal falls out of escrow.
Is it just me?
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2 responses so far ↓
1 Steven R. Smith, MSREA, MAI, SRA // Jan 9, 2008 at 12:06 am
This reminds me of when Jumbo lenders reduced their LTV from 70z% to 60% in 1986, the rest is history. De-ja-vue time.
2 Paul // Jan 9, 2008 at 4:31 pm
Mike, it’s not just you my friend.
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