Underwiriter's opinion of appraisal - mistake?

[Anonymous]

We got the appraisal back on the house we want to purchase and everything seemed to go well. It's valued at more than what we're paying, etc etc.

So, word came from the underwriter (via LO), that the house is in a declining market.  This affects our financing in modest way (we have to cough up more downpayment, which we can do but would rather keep that money to fix the house). I wouldn't have a problem with this, except I can't find ANYTHING in the appraisal that suggest our local market is on the decline. Sale prices are rising, the ratio of sale to listing price is improving, the number of days on market is going down, and the over number of sales is going up. There isn't anything in the appraisal that indicates a declining market! None of the forms indicate this, nor do any of the summary paragraphs. I've read them all several times!

The LO would talk to the UW about this, but I was wondering if anyone had an opinion or advice on what to say. We're scheduled to close on Friday!

Thanks!

Message Edited by DrDr on 08-19-2009 01:55 PM

[Anonymous]

the declining market tag will probably hang on areas that were hit hard until there has been a turn around for a couple consecutuve quarters or so.  The month by month reports are not enough to change this. 

[Anonymous]

The report included data going back 12 months. This mini-market, for lack of a better term, has been improving since then. This is what I find extremely puzzling! Argh!

[medicgrrl]

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@Anonymous wrote:

We got the appraisal back on the house we want to purchase and everything seemed to go well. It's valued at more than what we're paying, etc etc.

So, word came from the underwriter (via LO), that the house is in a declining market.  This affects our financing in modest way (we have to cough up more downpayment, which we can do but would rather keep that money to fix the house). I wouldn't have a problem with this, except I can't find ANYTHING in the appraisal that suggest our local market is on the decline. Sale prices are rising, the ratio of sale to listing price is improving, the number of days on market is going down, and the over number of sales is going up. There isn't anything in the appraisal that indicates a declining market! None of the forms indicate this, nor do any of the summary paragraphs. I've read them all several times!

The LO would talk to the UW about this, but I was wondering if anyone had an opinion or advice on what to say. We're scheduled to close on Friday!

Thanks!

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If this appraisal was done on Fannie Mae form 1004/Freddie Mac form 70 then you will see on the first page a section called "Neighborhood" (you will see this along the left side)  Within this section is another section called "One Unit Housing Trends"  There are 3 options for the property value trend....increasing, stable or declining.

[Anonymous]

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@medicgrrl wrote:
If this appraisal was done on Fannie Mae form 1004/Freddie Mac form 70 then you will see on the first page a section called "Neighborhood" (you will see this along the left side)  Within this section is another section called "One Unit Housing Trends"  There are 3 options for the property value trend....increasing, stable or declining.

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Yes, I saw that and it is clearly marked stable! That's what I don't get. How is the underwriting claiming the house is in a declining market. To quote: "I feel like I'm taking crazy pills!"

[Anonymous]

UPDATE!

The LO  is still waiting to hear from the exception desk(?) and UW. They ignored my calls and email messages so it doesn't look like we'll be closing on Friday. Argh!