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#1991092 - 01/26/15 08:35 PM Definition of "an est. of value of the property"
WHEDA Offline
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WHEDA
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Wisconsin
One of the six pieces of data included in the 1024.2(b) definition of an Application is "an estimate of the value of the property". The scenario posed to me is: Consumer meets with LO and states "I'm interested in buying the property at 123 Main St and it is listed at $220,000. I would like to get preapproved before I make an offer." The property is clearly identified but would the listing price qualify as an estimate of the value, thus triggering the need for a GFE?

"Best Practice" would, of course, be to issue a GFE, however, the LO didn't do that. Now, 6 days later, the consumer is back with an accepted offer at a purchase price of $209,000 and she wants to move forward with a full loan application. Is this going to be a "no cost" loan because the LO didn't issue a GFE on January 16th?

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#1991102 - 01/26/15 08:44 PM Re: Definition of "an est. of value of the property" WHEDA
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
I guess I'm curious why one would suggest that a listing price would not be an "estimate" of the property's value.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#1991134 - 01/26/15 09:30 PM Re: Definition of "an est. of value of the property" WHEDA
WHEDA Offline
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WHEDA
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Wisconsin
That's a good question. In my opinion it is an estimate of value but LO is arguing that the value is what the buyer and seller agree on. In my opinion, both are estimates of the value with the actual value not known until an appraisal is received.

Dan, may I assume from your response that the MLOs in your shop would be, or damned well better be, issuing a GFE within 3 days of the first meeting in my scenario?

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#1991151 - 01/26/15 09:50 PM Re: Definition of "an est. of value of the property" WHEDA
#Just Jay Online
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#Just Jay
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Cheeseheadland
Your LO is full of it.
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#1991159 - 01/26/15 09:56 PM Re: Definition of "an est. of value of the property" WHEDA
WHEDA Offline
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WHEDA
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Posts: 189
Wisconsin
Thanks Jay. I like that response, although I probably can't quote it back at him. ; )

Would you consider this a zero cost loan to the borrower or can a GFE still be issued and fees charged?

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#1991170 - 01/26/15 10:06 PM Re: Definition of "an est. of value of the property" WHEDA
#Just Jay Online
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#Just Jay
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Cheeseheadland
IMO, no. Well, maybe yes if only to teach him a lesson, but otherwise no, I do not.
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