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Appraisal value and the final credit decision

Our underwriters do not revisit applications after the conditional approval is issued; why would an underwriting condition make our applications not “fully approved”?

Consider an approval subject to an acceptable appraisal and 80% loan to value. When the appraisal is received, it is reviewed by someone in your institution authorized to do so and a decision made whether the value is sufficient to support the loan requested. If the appraised value received provides the required loan to value, the decision is yes and the loan can go to closing assuming other conditions are met. If the appraised value comes in low, resulting in an unacceptable loan to value, some action is needed such as a higher down payment, a lower loan amount, additional collateral or a denial of the application. That decision upon receipt and review of the appraisal is the final credit decision.
Learn more about Kathleen Blanchard’s webinar Reporting HMDA Action Taken for Conditional Approvals

First published on 05/12/2019

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