Skip to main content

Why Do Lenders Require a Real Estate Contract?

     
Why Do Lenders Require 
a Real Estate Contract?


http://www.genemundt.com     One of the Loan Officers in my office had a Seller's Attorney recently ask him ... 

     "Why does a Lender need a copy of the Real Estate Contract?"

     Admittedly, I was somewhat taken-aback by this basic question, but I believe my LO handled it pretty well.  He responded to the attorney with 2 questions of his own:  

  • How else would a Lender be able to confirm the actual terms of a real estate sale?
  • What Appraiser would accept an Appraisal Order without receiving a copy of the Contract in a Purchase Transaction?
 
     Below is what Fannie Mae has to say regarding this issue:

     Fannie Mae's policy is intended to help ensure that the appraiser is aware of all relevant aspects of the transaction.  The sales contract provides important sales and financing data, including whether there are any concessions as part of the transaction.  

     If the contract is amended, the Lender must provide the updated contract to the appraiser to ensure that the appraiser has been given the opportunity to consider any changes and their effect on value.  If the appraiser determines that there is no impact to value, then no additional commentary is required from the appraiser. 


      This fact may be unknown to clients and others within a transaction:  But when a Mortgage Lender prepares a Loan Application and/or Good Faith Estimate for a Purchase Transaction, they MUST correctly disclose the effect of Real Estate Transfer Taxes, as dictated by the terms of the Contract.

https://1609956119.secure-loancenter.com/FreeConsult.aspx
     Participants within a transaction must be aware that:  Every transaction is uniquely agreed to by the parties involved ... and every community, county, and state is different in this regard. 

     Facts are:
  1.  Not all municipalities or jurisdictions charge such fees.  Some charge the Buyer.  Others charge the Seller. 
  2.  Entities such as Fannie Mae, Freddie Mac, FHA, VA, and others simply are exempt from paying Transfer Taxes.  

     Lenders and Appraisers need to know:
  • Are there any Closing Cost Credits?
  • Are there any Concessions being offered by the Seller?
  • If Concessions are involved, do they impact Value?
  • Is the transaction an "Arms-length Deal"?       
     and very importantly, they also need to know:

  • Contingency dates for financing
  • Closing Dates
  • Real Estate Tax Proration Agreements
  • Names of the participants in the transaction, including but not limited to the obvious ones 
     
     The Lender's ultimate task is to Close the transaction and provide the funding.  But in order to do that ALL the relevant data must be made available ... and/or be tracked down. 

     It's important to be aware and understand why this information is needed.  It's more important to comply.  The financing process will meet challenges and delays if the information is missing ... 


http://www.genemundt.com/ContactUs.aspx

     *  Hoping to Buy a home in the Greater Chicagoland area?  Contact Me Today!  I'll put my 37 years of Mortgage experience hard to work on your (or your clients') behalf.
     I can be easily found at:
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax:  815.524.2281
 https://1609956119.secure-loancenter.com/FreeConsult.aspx
 




  Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   Digg Acct. of Gene Mundt, Mortgage Lender


 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender    Klout Acct. of Gene Mundt, Mortgage Lender    Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender 


Gene Mundt, Mortgage Lender, a Lender with 36 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL



Referrals are Welcomed!

 

           

Comments

Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...


“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.

Rem…

Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?


These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:


Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…