Aloha Friday,

The topic today is underwriting times and situations occurring on bank owned or short sale properties. On four files over the past week we have had very short fuses put in place by banks once escrow is open on a short sale or REO property. They are agreeing to the terms and wanting to close within two-three weeks of closing once the escrow is open. The dilemma is twofold:

1) The borrowers do not want to pay for an appraisal until they are in escrow. This of course means that we cannot fully begin processing a file until escrow is open as we must have an appraisal in hand when submitting the file for the final underwriting.

2) The underwriting times from our banks are anywhere from 5-14 days in underwriting depending on the bank and their competitiveness in rates. Of course the more competitive the rates, the longer the wait for underwriting. By the way, refinances are nothing less than 12-18 days depending on the institution.

So, what do we do? The only way to head this off is to communicate with the lender at the time of opening escrow that 2-3 weeks is not reasonable in this lending environment with the amount of financing now occurring.

The rates came down a bit this week and the 30 year fixed are looking great.

Also, we now have a 30 year fixed JUMBO. The rate is okay at 6.625% at 1 point up to $6 million. Decent but not what we all want yet. It is the start of the dam breaking down so that is good news!!

Please let me know if you have any questions as we look forward to continuing to earn your business.

-Dean Rathbun