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Declining Area

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I was in the process of refinancing and got the denial because my property is in declining zone. Initially i was getting loan up to 80% on the loan amount of $1000000 however later on the said that they can refi only up to 70%. They say that my property is in declining area D. Where can i see that my property is in declining area or not? this concept of deducting 10% LTV is with all the lenders or it changes lender to lender??? which lender should i approach so that i can do my loan!!!!!
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November 05 - Santa Clara
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Profile picture for CA UMB
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Since January 2009

Mike (OP) I'd talk to Mike (LO) he's familar with a lender that's doing 80% in Santa Clara. If that's not enough you also share the same name. :>) ... Best wishes, Rudi
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November 06
Profile picture for Mike Politzer
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Since August 2009

I know of some lenders that will go to 80% in Santa Clara on this scenario, so, if the appraisal isn't marked declining, I'm thinking it's possible to get there. In this case, the borrower would need to address that here. Only pointing it out since it leaves the door open for 80% still - just not with his current lender.
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November 06
Profile picture for CA UMB
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Since January 2009

Mike,

As you know, 80% would be the norm. 75% is taking into account the declining market area. In CA that's hard to dispute. But, we also don't know what the appraaisal and brokers comps came in at either. That may be able to be disputed. Surely Mike, you've run into this lately, haven't you? You're also located in Jumob-Land.
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November 06
Profile picture for Mike Politzer
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Since August 2009

Rudi, I'm not sure on this but don't some lenders have a 5% hit if the appraisal is checked declining - putting aside the overriding 5% for declining market in general? The implication being that the issue becomes additive and with a different lender, different appraisal without that checked you might get to 80%?
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November 06
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Since January 2009

Mike,

If Greg's right, it was JMAC, you should be OK with any other Jumbo Lender at 75%.
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November 06
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Since January 2009

I am guessing the lender is JMAC, they have the ABCD tiered declining markets. This is also something that is known up front when submitting so if the LO didn't check, it's not the lenders fault for their guidelines, it's the Lo's fault for not reading them. 
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November 06
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Since November 2009

Citibank pulled the "declining market and lower LTV" on me earlier this year when I refi'd, but it was on resubordinating a second. They capped the CLTV at 65%. Fortunately, I came in at just under 64% on the appraisal, but I'd hate to think about how the numbers would play out now.

Before the lower LTV because of declining market, Citi told me their CLTV limit was at 90%.
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November 06
Profile picture for CA UMB
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Since January 2009

I'm with Frank. Sure would like to know the lender. Not the broker. In a declining market area you should be able to receive 75%. 80% would be very difficult. ... Did you receive your appraisal?
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November 06
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Since August 2009

Hi Mike,

Some lenders specify declining areas by county, some by zip code and some do not specify an area as declining at all but will restrict the LTV if the appraisal report states that the property is in a declining area.

My assumption is that all of Santa Clara would currently be considered "declining" by all of these methods.  I am surprised that you are being given an additional 10% restriction.  I would think that your restriction would only be 5% taking you down to a 75% max LTV.  Assuming a 740+ FICO there should be a lender able to do this at a 75% LTV.  What lender was your file submitted to? 
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November 05
 

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