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P.G. House Deemed Too Round For a Loan

by Mark Wellborn

image
Photo courtesy of Mae M. Ngai and John G. New

Poor credit, a low annual salary and high levels of debt are all reasons that you might be turned down for a loan.

However, last Saturday, The Washington Post ran an article about a couple who were turned down twice by mortgage lenders for a home in Prince George’s County because of the property’s unusual shape.

From The Post article that was written by potential buyers Mae M. Ngai and John G. New:

Being “unusual” or “unique,” it was deemed “not marketable.” Despite its evident worth and multiple independent appraisals, the lenders said they could not assign a value to the house because there were no comparable properties. And, with no “value,” there was insufficient collateral for a loan.

UrbanTurf spoke with Prosperity Mortgage’s Tom O’Keefe about how often this seemingly strange situation occurs.

“One of the pieces that lenders look at is the house itself and if it is so unique, sometimes its value can’t be supported with comps,” O’Keefe said. “I have seen it happen, but only very, very rarely.”

The buyers being considered a risk and the fact that there were not suitable comps were not the only issues. The lenders also felt that if the couple defaulted on their payments, it would be difficult to resell the house because of its unique design.

This article originally published at https://dc.urbanturf.com/articles/blog/p.g._house_deemed_too_round_for_a_loan/2652

4 Comments

  1. mike said at 12:33 pm on Thursday November 11, 2010:

    To paraphrase Raising Arizona:

    “this house come in funny shapes?”
    “Nah, lessin’ you think round is funny”

    Hard to believe how crazy it’s gotten to get a loan these days.  20% down and can’t get a loan…nuts.

  1. CBJackson said at 2:15 pm on Thursday November 11, 2010:

    SILLY. I am no RE professional, but seems to me the factors include: lot sq/ft, house sq/ft, beds, baths, parking, school systems, taxes, fees, amenities, original details, historic significance (was the round house designed by a famous architect) etc. Seems like these lenders have their heads so far up their bureaucracy, they cannot see or think straight.

  1. JT said at 11:25 am on Friday November 12, 2010:

    I think they were just being nice by saying it was “too round”.

  1. a said at 1:26 pm on Friday November 12, 2010:

    this is pathetic.

    btw, you have the easiest to read captcha box out there. thank you for that.

Comments are closed.

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