Nothing to compare to?

[Lisa Dibert]

What happens when you are told that you can't get a mortgage because there is no house in the 20 mile radius that has been sold in the past 3 years to compare your property to? Its a very old victorian duplex that we are renovating. We are purchasing the property privately from a friend. Any advice would be appreciated. We don't understand much about this.

 

[larryhaskell]

Lisa:

Tell the lender they will be hearing from your attorney. Be prepared to hire an attorney familiar with real estate law. The purchasers of loans in the secondary market like Fannie Mae don't have a mileage limit for comparable sales. From personal experience, I have appraised several properties in rural Nevada where the comparable sales were 30 to 40 miles away. The distance between the subject property and comparable sales were never questioned. It may be that you have a loan officer or underwriter that just doesn't want to deal with an ugly appraisal. Good luck.

 

[Dave Smith]

Lisa:
There is always SOMETHING to compare to. It just isn't as pretty as some individuals would like it to be.

Larry is right. Force the issue.

 

[graindart]

I'd have to disagree.......why would anyone "force the issue" in this instance. I'm of the notion that if someone or some business doesn't want to do something for me, there are plenty more places to go. What does it profit for you to force a lender to proceed with an appraisal? Only one of two things will happen.......number 1.....the appraisal comes back good and the loan closes and you just made this lender money (the lender wins)........number 2.......the lender squashes your loan for any number of reasons and you're stuck paying for the appraisal (you lose time and money). However if you just let it be and move your business elsewhere, you save time, money, and probably get treated better. If it becomes a trend the original lender will learn to be more accomodating or learn to live on a lot less money, either way he's learned his lesson.

 

[xmrdfghap]

Chances are the LO or his underwriter just doesn't want to loan you the money for reasons he is afraid to tell you about. There is also a good chance the reason has to do with a legal issue such as race, religion, gender, etc....otherwise he would tell you the truth.

The other possiblility is that his loan guidelines prevent him from doing loans in a market where there is minimal activity and he (again) doesn't want to tell you the truth.

My suggestion would be to find another lender......there are plenty around who will be happy to loan on just about anything........assuming you have decent credit.

 

[Terrel L. Shields]

Because your bank is backed by government insurance paid with YOUR MONEY they do have a responsibility to you. The practise of eliminating your property due to its distance is called REDLINING. IT IS AGAINST THE LAW. Ask your bank for a WRITTEN statement to what they said. Then take it to court.

You cannot deny people a loan on the basis they live on the wrong side of the tracks, or the wrong distance from the tracks. Or, they are the wrong color or ethnicity.

 

[Anonymous]

Lisa,

Man alot of doom and gloomers responding here. OK, here is the deal. Some appraiser has told the bank that there are no duplexes like your old victorian and he doesnt want to do the appraisal. This is my guess. As far as there not being mileage limtis, yes there are. They are different for urban, suburban and rural areas. They can be exceeded as long as they are adequately explained.

I have a question for you Lisa, you state this is a duplex. Are you buying the entire duplex? Are you buying one half the duplex to live in. In some areas, both senarios are very common. If it is the first senario, it would explain to the bank that it really doesnt matter that there are know sales that are victorian duplexes, this is an investment property and the income potentialis what should be valued. The typical investor does not care if it is a victorian or a modular if they both earn the same amount of money. The income stream can be measured and valued, thus an appraisal could be completed.

Let us know.

 

[Lisa Dibert]

We are purchasing the entire duplex. Both sides. We will live in one side and use the other side as an source of income (hopefully). Its a great home. We are supplying a lot for anyone who rents...a grand backyard with the maintanence done by use and wonderful landscaping, all kitchen appliances are brand spanking new, hardwood dining room floor, new carpeting, new paint...completely redone.

Each side has 4 bedrooms, 2 baths, LR, DR, Kitchen, basement. The rental side has a breakfast nook where our side has a butler's pantry. We have a lot of time, work, and $$ invested in the restoration and just want to be able to buy it.

Does it make a difference that we were trying to go through a credit union? They said something about the appraisal would have to be up to FHA standards and they had nothing to compare it to within the 20 miles radius that is required.

 

[graindart]

It might be different where you live, but very few credit unions up here do 1st mortgages.....and even fewer have anything to do with financing income producing properties. Banks usually have more options when it comes to financing homes.

 

[Pamela Crowley (Florida)]

Lisa,

If you'd like, send me your location and phone number privately and I will have an honest loan officer with a good national company contact you. Or, give you his name and number for you to contact him. Your choice. He probably won't be able to handle the loan for you but he will be able to refer you to someone close to your location and keep an eye on it for you.

Sounds like your credit union just doesn't have a program that your property will 'fit' into. There are plenty of others that will happily help you. Unfortunately, there are also many out there that will say they can when they really can't. They will take some of your money to get the process started, string you along, and later tell you they can't do it and they can't refund any monies you gave to them.

It is very nasty out there in the loan biz and honest loan officers are rare.