Tracy's LA Real Estate

Why your loan may be denied. The first article of this series described an epidemic of late-stage mortgage loan rejections. These rejections are very costly to consumers because they occur after the payment of an appraisal fee, and in some cases after payment of a nonrefundable fee to the lender.A major factor underlying the increase in late-stage rejections is a decline in the quality of appraisals, which is the subject of this article. Why appraisal quality has declined: market factors Part of the decline in appraisal quality has been the result of market factors beyond anyone's control. Home-price weakness: During the go-go years before 2007, home prices generally increased. Both appraisers and underwriters implicitly assumed price increases would continue, which imparted an upward bias to appraisals.