| The best way to explain why a mortgage professional | | | | were dealing with called and told them the value they |
| is always better than a banker is to use an anecdote. | | | | would use for the loan, and it turned out to be about |
| My parents lived in the house I grew up in for 35 | | | | $10,000 less than they expected. This meant they |
| years, so it was finally time to move. They found a | | | | would not have the money they hoped for, and they |
| home they liked, made an offer, and signed a | | | | would now have to put less money down on their |
| purchase agreement. After conferring with me, they | | | | new home. This would, of course, lead to other |
| decided to go to a bank - one of the more well-known | | | | problems - like a higher monthly mortgage payment |
| mortgage banks in the region. Of course, I thought a | | | | and less money for moving expenses. They were, to |
| good mortgage professional would be better, and I told | | | | say the least, devastated. |
| them I could follow the deal from start to finish, if they | | | | Being the proactive person that I am, I decided to |
| went with a company I previously worked for, but the | | | | intervene and call their bank. I spoke with one of the |
| bank they decided on offered a little better rate and | | | | many loan officers (you see, you don't have just one |
| lower fees, so they wanted to go with them. | | | | person handling you at a bank; you're just another loan |
| I told them to go ahead, but I was nervous, knowing | | | | number). I had, of course, already done my own |
| what I know about large banks, ones that are not | | | | research and learned that the value of my parents' |
| wholesale lenders, who work with mortgage | | | | house should be much higher. I asked the loan officer |
| professionals. After many trips to the bank (remember, | | | | to explain how they came to this very low value. She |
| bank loan officers don't come to you) that included | | | | fumbled through her answer and told me they use |
| plenty of hassles over paperwork, they agreed on a | | | | comparable sales prices in the area and that they don't |
| loan for their new home. The next step was to sell | | | | do a drive-by appraisal. |
| their house, so they could use the proceeds for a | | | | She said I would have to talk to someone in their |
| down payment and moving expenses. My parents had | | | | equity department, because she didn't know what |
| over $60,000 in equity and wanted to put a good | | | | other options there were. I was somewhat surprised |
| chunk down on their new house and use the rest for | | | | at her lack of intimate knowledge with the bank's |
| expenses. | | | | policies, but I certainly wasn't shocked. This is the |
| Since time was against them - they had 30 days to | | | | nature of home loan operations at a bank - one |
| pay off the seller of their new home, and they didn't | | | | person passes the responsibility to another and only in |
| have an immediate offer on their current residence - | | | | rare instances does one department really know what |
| they decided to apply for a bridge loan (more on | | | | the other is doing. You'll never have this problem with a |
| bridge loans later). This would take the equity from | | | | good mortgage professional. |
| their current home and use it to pay off their | | | | After being channeled through another receptionist at |
| mortgage, leaving them enough money for the down | | | | the same branch office, I wound up speaking to an |
| payment on their new house. When they sold their old | | | | underwriter in the equity department. She told me that |
| home, they would use that money to pay off the | | | | a drive-by was, in fact, done. I explained to her as I had |
| bridge loan. Here is where things got very dicey. | | | | the other woman why the value was inaccurate. (I had |
| Their new lender offered 85 percent of the value of | | | | very accurate comparable sales prices from different |
| their home for the bridge loan. So, if the home | | | | resources, given to me by one of the area's best |
| appraised for $100,000, they would get $85,000. They | | | | appraisers.) |
| assumed the value would be there. The bank sent an | | | | I asked the equity underwriter if my parents could |
| appraiser on a drive-by, which means my parents | | | | have a complete interior appraisal done to give a true |
| weren't notified, and the appraiser did not go in the | | | | value, and she said this was an acceptable option. In |
| house. He then wrote up the value for the bank's loan | | | | the end, my parents got the value they needed, and |
| underwriter. Drive-by appraisals almost always come in | | | | things worked out just fine. They needed a quality |
| lower than the home's actual value. | | | | mortgage professional, though, to get it done. |
| Now one of the three or four loan officers my parents | | | | |