Let’s talk about declining market values some more, shall we? 

 

I submitting a mortgage application to a lender last week for a 4 family purchase in Brooklyn, NY.  The house was 775k and we were borrowing 90% of the value, which is around 696,000. This is allowed by the bank guidelines, and the people needed PMI.

 

The PMI company, has Brooklyn in a restricted market area and considered it a declining market value. So, they took 5% off the top of the appraisal.  Which is still fine because, we had 10% to put down.  HOWEVER, the PMI company has maximized the dollar amount to borrow in that area to $650,000. So, now the PMI companies are dictating the dollar amount of the loans they will do.

 

My clients qualify for the loan the loan to value is fine and the area is not in a declining market area according to the charts. However, the PMI company decided on their own to lower the loan amount.  Not only is this frustrated, but it is unfair.

 

The point of my story is keep in touch with whomever is working on your loan.  When the rules change, you have to change with them.  Those that are informed, get their loans done smoothly.  Those that are not, move in with their parents!

 

The happy ending to my story is that my lender was able to find another mortgage insurance company that did not have this restriction and we were able to borrow the 696,000!  Thank you Aline!!

 

Dale Siegel