With lending starting to tighten up because of recent legislation passing and the shake ups at major banks, some home buyers are starting to find it difficult to find lending on certain properties. Those properties are none other than REO properties that are flooding the market right now.
Why can’t buyers get funding?
Since most REO properties are in distress, in order to obtain funding most appraisals are not passing so banks are unwilling to lend the money unless it is a 203K or rehab loan to fix the property. Very few banks are going to put the money in for the required repairs and are thus asking for buyers to obtain a 203K.
Recently working with a couple of different clients, this type of loan has been the only thing that they will accept. But trying to find a lender that actually has this type of product has proven difficult.
