elizafish47, Home Buyer in Portsmouth, NH

I tried to buy a house using a VA loan. Underwriter rejected the loan because the house did not offer definite collateral value.

Asked by elizafish47, Portsmouth, NH Fri Feb 15, 2013

But I am told that if I had been seeking a conventional mortgage with down payment, this would not have been an issue. Excellent credit. Current house under water and rented until market improves. Hence no down payment. Need to move for business.

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Elizafish47, It sounds like the VA appraisal brought issues to the forefront. VA appraisals are ALL ordered directly through VA and no lender can change or modify which appraiser is assigned the task of the inspection. Further, VA is ultimately entirely focused on protecting you, the Veteran and/or spouse/family. This does not sound like an issue that could solved by switching up lenders....UNLESS the lender is being overly critical of the appraisal.

As a Fannie/Freddie and GinnieMae direct lender, we have very few overlays or add-on's to our lending guidelines. As a USACares.org certified VA lender I am committed to representing our active and retired Veterans to the best of my ability.

Before you jump ship on the house, you might consider having another lender review the appraisal. I could get that accomplished pretty quickly...as I am sure others could. Your loan is registered through VA so it would have to be transferred (pretty easy, actually) once you know the lender approves the appraisal.

Be happy to clarify any questions for you!

All my best,

Deborah
NMLS #279125
(951) 795-4547
1 vote Thank Flag Link Fri Feb 15, 2013
Actually, I'm not sure the problem is a VA appraisal. The appraised value came out above the value we would pay. We had all the right inspection things done -- ie. radon and arsenic in the water, etc. All o ther problems solved by seller. The appraiser chose to assess the house as a duplex, which it is not. It was a sort of duplex once in its history, but is too close to the road to legally be a duplex by zoning laws. It was listed as a one family home and we bought it as a one family home. Underwriter was bothered by statements like "bedroom requires passage thru living room and dining room to get to bathroom" which translates as passage from loft room (which might occasionally be a guest room -- no closet, just great view) through what I would classify as the family room to get to the bathroom -- which for short term I consider OK. House will only be occupied by myself and husband, sleeping in other end of house in real bedroom with closet, bathroom right next door. Since it was written up as a duplex, for which it falls short, lender is afraid that if we duck out on the mortgage he will not be able to sell it for enough money. No comps (not a cookie cutter house. but with beautiful gardens) makes him reluctant to accept appraised value. Never mind that my husband and I have never ducked out on a house, paid one off in full, have excellent credit, etc. So I ask them, what about the $36,000 guaranteed by the VA? No answer. Since lender raised questions, all other perspective lenders we talk to are afraid. I think the content of the appraisal as a duplex is wrong, but I don't get another one.

Anyway, husband talked to a VA lender today who may be able to help. Only cares about appraised value not steps to the bathroom from non-bedroom..

Since I am repeatedly assured that if we were seeking a conventional mortgage, buying this house would be no problem, I believe the problem is prejudice against VA loans. I don't see that the lender's risks change appreciably by my bringing $10,000 to the table. Market very tight. really no other homes in our price range. I have watched the market for 3 years and it just gets tighter and higher priced.
0 votes Thank Flag Link Fri Feb 15, 2013
Hi Elizafish47,
I closed escrow on a VA loan for my client today, actually. If a Realtor or Lender isn't familiar with VA guidelines, the possibility of a difficult escrow is greater. I have never personally had any issue with my clients using a VA loan to obtain their home in So California. Call me so we can review your scenario. I'd be happy to help!

Janna Piper
Realtor
(951) 903-3134
Serving Rancho Cucamonga and the Inland Empire for 13 years!
0 votes Thank Flag Link Fri Feb 15, 2013
Elizafish47,
You definitely must keep looking for homes. When one home does not work pick up that weight left over and find something possibly better that will suite your current situation. The value did not come in ok! No Problem! In this market especially in this area this isnt something unfamiliar to us Realtors. No you do not have a down payment. No problem! There are ways to go around this. Give me a call or email and lets discuss a few possibilities.
Cell 323 2097677
Email ndemmings@ziprealty.com
Website: ziprealty.com/agent/ndemmings

I look forward to servicing you soon! :)
Nira'
0 votes Thank Flag Link Fri Feb 15, 2013
It would seem that you have limited possibilities:
How about finding another house, that you can qualify for, and meets VA requirements?

And thanks, for Serving.
0 votes Thank Flag Link Fri Feb 15, 2013
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