Low valuation could sideline your loan approval
He wasn't optimistic.
"You can say a short sale is this extenuating circumstance or that extenuating circumstance, but if the only homes in your area to sell are the short sales, that becomes the market," Walsh said. "On the other hand, you can make the point, perhaps, that the short-sale properties had the kitchen features ripped out, the copper was stolen and the Sheetrock was destroyed. That's a material difference. Again, it's all about knowing the information so as to be able to ascertain if that short sale was a true indicator."
You can appeal an appraisal, Walsh said. "Sometimes the appraiser doesn't have information that is up-to-date or accurate, so the borrower does have the ability to point out those mistakes and say, 'I would like the appraisal to be re-evaluated based upon this new information.'"
Walsh founded Total Mortgage Services in 1997 and today it is licensed in 27 states plus the District of Columbia. The company's reach extends from Maine to Florida and then skips westward to Illinois, Texas and California.
As I always do when I come across a nonbank mortgage originator, I ask how the company survived the recession when so many in that industry folded up like the house of cards they were.
His answer: "We never did any subprime loans, we never (did) option ARMs or any of the other exotic loans. We stuck to the good-credit, low-loan-to-value customers we felt were going to continue to pay their mortgages. Our philosophy was we were not going to put people into mortgages they weren't going to be able to pay."
Total Mortgage's conservative lending policy must have worked, because, Walsh said, "In 15 years, we've never had to buy back a single loan."
So what's Walsh's outlook for the housing the industry?
"The housing market has come close to bottom if not being at the bottom," he said. "We are starting to see purchase activity pick up a bit. I'm more optimistic than I've been in several years about the housing market.
"With rates as low as they are, it's a tremendous time to buy or refinance. People are starting to take advantage of that. When you can get a home with an interest rate in the mid-3 percent range on a 30-year-fixed, that's cheap money."
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "Growing Up Levittown: In a Time of Conformity, Controversy and Cultural Crisis," is now available for sale on Amazon.com.
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