Forget about the lawyers, Realtors, sellers and buyers have a new enemy in the real estate transaction. The mortgage guys.
In an effort to deliver “high quality” loans that are (usually) not sold to Fannie Mae, Freddie Mac, FHA or VA, lenders get to set their own guidelines are rules for loans.
The bank can say that you can or can’t do something and if you don’t do it, you don’t get the great rate you were promised and locked in to.
Example? I just had a lender tell buyer (I was on the Seller side) that the washer and dryer are personal property and it must be REMOVED from the contract. If they did not do that, the loan would not go through.
So now, the buyers have “given up” what they negotiated. And, if we actually include the washer and dryer, are we committing mortgage fraud?
The lender is boxing everyone in to what they want because he who has the gold, makes the rules.
What will they want next? The copy of the home inspection and every repair done before closing?
We have all committed mortgage fraud in the past but we did not realize it. Fannie, Freddie, etc. says that the seller can only give a credit “towards closing costs” even though they are a credit for repairs. Isn’t it silly that we must label it that way? Shouldn’t we just be able to have a seller credit and as long as it meets the numerical guidelines, just let it happen?
Silliness, yes but the rules are the rules and the banks are making more of them.