LOANS & APPRAISALS

What do agents and homebuyers need to watch out for in the world of lending next year?

Jim Linnane, Guaranteed Rate: As rates are likely to shift up next year, there is also likely to be an additional sense of urgency among those who have been on the homebuying sidelines. High-quality preapprovals will be important, and state-of-the-art technology will give agents and homebuyers information in real time.

Paul Lueken, Draper and Kramer Mortgage Corp.: There is nothing on the horizon that should derail the lending market. Lenders and agencies continue to ease some of the restrictions by removing strict overlays on loan programs and creating more common-sense loan products.

Twenty-two percent of failed contracts, according to NAR, are because of issues obtaining financing; will lending standards ease in 2017, or are they just where they need to be?

Paul Lueken, Draper and Kramer Mortgage Corp.: Lending standards are easing as we see new programs coming out that help out the borrower who does not fit in the perfect box that was created post-2007. These programs are more common sense and not reckless as some were pre-2007. I think we will continue to see the lending community evolve to a balance between the too-tight and the ultra-loose.

Do you think interest rates will go up in 2017? If yes, how soon will we see them rise?

Dan Goodwin, The Inland Group: Interest rates for mortgages have been 3.5 percent to 3.6 percent, and it is expected the Federal Reserve will increase rates soon. So next year you will see higher mortgage rates, which could affect home sales. It is assumed the new administration will have a major impact on altering Dodd-Frank rules, untying some of the red tape lenders operate under.

Paul Lueken, Draper and Kramer Mortgage Corp.: I think rates will rise in 2017, but not as dramatically as they did during the second half of 2013 and the first quarter of 2014. The Fed will raise short-term rates, and we should see rates move to around 4 percent, plus or minus a bit.

According to the Appraisal Institute, the number of appraisers has decreased by 22 percent since the onset of the mortgage crisis. Do you think there is a shortage of qualified appraisers? If yes, how will that affect closings in 2017?

Mike Sato, Jameson Sotheby’s: Lenders have warned us that appraisals are taking longer, and they have often slowed the loan approval process. It is challenging to close on a property quickly unless a buyer is paying cash. Brokers definitely have to take that into consideration when writing offers for their buyers.

Rebecca Thomson, @properties: If the number of appraisers continues to decline, the appraisal industry is going to face a number of challenges. With fewer appraisers they will have higher workloads, which could mean less time to dedicate to each appraisal; delays, then, would result in longer timelines for satisfying financing contingencies. What does this mean today? That it is much more important to respond to appraisal requests and questions in a timely fashion. If an appraiser is calling to confirm data on a past sale, it is our responsibility to ensure we get back to them so that their appraisal is based on the best information available to them.

Dan Goodwin, The Inland Group: Some appraisers are getting out of the business because they are being asked to work harder and get paid less due to increased regulation. With a new presidential administration, it is expected that we will see a reduction in regulation, and that could bring more people back into the business.