More Mortgage Problems Ahead
We can now add another wrinkle to the on-going mortgage mess. It seems that we are all impacted by it, in one way or another. The latest problem has to do with purchase money loans.
As if it weren’t hard enough to locate, negotiate, and beat out competing buyers for a good home in our area, now a buyer cannot be sure that their “pre-approved” loan is going to actually be there when it comes time to close escrow. Some lenders are now finding reasons, just prior to close of escrow, to call for another “review appraisal” or additional down payment money (due to “falling values in the Bay Area” – as if all Bay Area neighborhoods were falling in value! They’re not.).
The bottom line: A buyer cannot be sure they will be able to close escrow on time. This potentially puts the buyer’s deposit (usually 3% of the purchase price) at risk of loss, due to a breech of contract.
Advice to buyers: Allow more time (30 to 45 days) for close of escrow and be prepared to add to the down payment, if necessary.
Note: 2008 ½ yearly sales data and reports will be ready next week.