We had quite a spirited discussion in the Pacific Union Market Watch meeting this morning about loans, escrows, and new lender regulations. In a nutshell, it’s key that buyers and sellers set their expectations for delayed or even cancelled escrows.
Though loans funding smoothly in 30 days or less used to be the norm, there’s a landmine of issues to navigate in the current market. And that’s slowing everything down. There’s the lender who funded a loan and then reversed the wire to the title company on the day escrow was scheduled to close, subsequently deciding not to fund. Banks are requiring multiple appraisal reviews, which are sometimes resulting in denied loans. Loans are being rejected due to a particular property characteristic (i.e., an unwarranted unit). A second loan review is often being ordered shortly before closing, delaying the close of escrow. Even buyers with as much as 50% down are enduring the scrutiny.Continue Reading