• Fri. May 13th, 2022

In age of coronavirus, Houston real estate appraisers are keeping their distance

For Ed Woodruff, the call was routine. Before a lender gave a homeowner a new mortgage that would allow her to take advantage of historically low interest rates, he asked her to give her expert opinion on the value of the home.

But this owner’s response was something he hadn’t heard before in 42 years of home appraisal.

“She said, ‘No way – I’m doing self-quarantine,’ recalls Woodruff, an assessor. “There is no way you can do that at my place.” “

As the novel coronavirus has changed the way people interact, some aspects of real estate transactions traditionally done in person are losing popularity. Many homeowners are reluctant to allow appraisers to enter their homes, and some appraisers are also reluctant to enter a stranger’s space.

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To compound the difficulties, securities companies have reported more requests for virtual closings, which not all lenders will accept, and employers have become harder to reach to verify people’s income as most offices have closed.

All of this slows down the ability of people to buy or refinance homes. The problem has become so urgent that buyers of government-sponsored mortgages Freddie Mac and Fannie Mae announced on March 23 that they were relaxing valuation and employment verification standards on mortgages they would buy. .

“Drive-through” appraisals, which estimate a home’s value based solely on exterior observation of a home, and “computer-based appraisals,” which rely solely on online home data, are now sufficient. The same is true of verifying income with a pay stub or bank statement showing a payroll deposit from the most recent pay period. Loans from the Federal Housing Administration and the US Department of Agriculture followed suit on March 27. The Veterans Affairs Loans relaxed their appraisal requirements on the same day.

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“Is it a risk? Asked Chad Helmcamp, owner of BWC Lending. “There is always a risk, if it is not a comprehensive and well thought out assessment, that something may be overlooked. “

Rob Coke, who runs the appraisal service for mortgage lender PrimeLending, said that before buyers of government-sponsored mortgages relaxed their appraisal standards, he could count the number of external appraisals only that the bank had used both hands.

“Now I can’t give you a specific number on what percentage of our orders (don’t use domestic ratings) because everything is so new… but it’s a high number,” he said. Monday.

The changes mark a distinct change from past practices. Woodruff said raters have been fighting drive-thru reviews for a long time.

“You can’t tell if they have vinyl on the floors or high quality flooring. You can’t tell if it has granite countertops or old formica, ”he said. “You don’t know if it was emptied due to the flooding and has never been fixed.”

Now, with an invisible virus endangering his health and that of the owners he works with, he said, “every reviewer I know is changing their act.”

Eric Divjak, owner of Divjak Appraisals, is postponing all assessments that require an interior inspection until April 6.

“I think it would make more sense for lenders to go from inside inspections of occupied properties to drive-by,” he said.

Frank Nothaft, chief economist at real estate data company CoreLogic, said that while an appraiser refusing an appraisal can delay a fence, a landlord who refuses it can cancel it.

It happened to a Helmcamp refinance client before Freddie Mac and Fannie Mae started authorizing car tours.

“They literally didn’t want anyone to come to their house, so they ended their transaction,” he said. On a large scale, such decisions could put pressure on more lenders to start accepting drive-through valuations.

Owners’ decisions to limit social interactions also transformed the day it closed.

Patten Title clears the closing tables and other surfaces between the fences, when buyers and sellers traditionally sign the documents finalizing the transaction in front of a notary. And for lenders who will accept online notarization – legal in about 20 states, including Texas – Patten will close virtually, using a platform involving video conferencing over a secure connection to verify the identity of the signatories. and bear witness to their signatures.

Bills currently pending in Congress would allow online notarization in all states, prompting more lenders to start accepting them.

Stewart Title has implemented drive-through closures at some of its offices, where a notary will assist with the signing of documents from inside their car, to avoid bringing a client to the office or the notary to a home.

“If there’s lemonade to be made from lemon, it’s because it can have a propellant effect by allowing more things to be done remotely and online, which can be of huge benefit to borrowers. “said Eric Fontanot, President of Patten.

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