Navy FCU

[Fernando]

AI Overview

While a precise, real-time count of every lender offering 95% Loan-to-Value (LTV) loans is not available, these loans are common, with nearly all conventional lenders adhering to
Fannie Mae and Freddie Mac guidelines, which allow up to 95% LTV, and some extending to 97%.

Then the "low" purchase price was obviously a bargain price for the 95% LTV borrower.
Can I make comment that appraiser believe purchase price was below market?

 

[J Grant]

No one unless special cases get a 95% LTV. No skin in the game and if foreclosed, lender deserved the risk taken.

Plenty of buyers get 5% down if approved - or 3% down with FHA or zero down with VA. None of it matters unless it measurably affected price.

 

[Mike Ault]

Then the "low" purchase price was obviously a bargain price for the 95% LTV borrower.
Can I make comment that appraiser believe purchase price was below market?

It wasn't below-market due to financing, was it? People with no money will overpay for properties because they are primarily concerned with loan repayment terms while people paying cash have the greatest bargaining power and are primarily concerned with the value of the real estate which they are purchasing.

 

[Fernando]

It wasn't below-market due to financing, was it? People with no money will overpay for properties because they are primarily concerned with loan repayment terms

That's right

while people paying cash have the greatest bargaining power and are primarily concerned with the value of the real estate which they are purchasing.

Seller had no need to sell to 95% LTV buyer with the many paper work required.
My investor hat sees it's a bargain price. Why the appraiser indicated this comp as arms length is questionable.

 

[Mike Ault]

That's right

Seller had no need to sell to 95% LTV buyer with the many paper work required.
My investor hat sees it's a bargain price. Why the appraiser indicated this comp as arms length is questionable.

Well, you know what you need to do. Pick up the phone and ask a party to the transaction if they were related, had some business arrangement or if they were both well-informed and operating in their own best interest. Document that phone call in your workfile. It's called "verification".

 

[Fernando]

Well, you know what you need to do. Pick up the phone and ask a party to the transaction if they were related, had some business arrangement or if they were both well-informed and operating in their own best interest. Document that phone call in your workfile. It's called "verification".

Lender needs to pay me more to do more work which my peers normally don't do.

 

[Zoe]

My comp was not listed in MLS but was sold with Navy FCU as lender with 5% down. Rarely sees this lender around here.
My third party source indicated arms length but I'm not sure if appraiser was right.
I don't know about VA loans but I will indicate this financing in the report and let reader be aware.

I don't get the down payment part on VA loans. The arm's length part is what concerns me with your mentality relative to arm's length transaction.

I don't really get the down payment part on any appraisal you do on any arms length transaction.

Frankly, I don't know how you know the down payment.

VA don't send the appraiser the truth in lending disclosures on things like down payment.

The sales contract don't disclose things like down payment.

I don't know of any source that has knowledge of down payment except the borrower and the lender. They don't dislcose that.

You can discover through public records if a mortgage was recorded. Not the same as knowing down payment.

 

[Zoe]

Lawyers that do mortgages and title insurance know the mortgage amount. They are not concerned with down payment.

If you see favorable financing or whatever that influenced the arm's length transfer, you can do that.

 

[Tim Hicks (Texas)]

Lender needs to pay me more to do more work which my peers normally don't do.

How have you made it this many years and still have a license?

 

[Fernando]

How have you made it this many years and still have a license?

When you don't depend on appraisal as your main income, you can be selective in choosing assignments with better fees.