Declining Markets

Declining Market Listing effective with Locks starting May 18, 2009.

The Declining Market List is included here to use in determining if the property to be mortgaged is located in a depreciating area. The list will be updated periodically as market conditions change. CMB may on occasion dictate a deeper reduction when deemed appropriate.

The Declining Market Policy applies to all loan products (with a few exceptions*), programs and delivery methods.

For loan programs that allow and utilize a Community Second as subordinate financing, maximum CLTV/HCLTV is available, however a reduction in the LTV is required.

*NOTE: Excludes FHA Streamline Refinance loans without an appraisal.

Only FHA Loans using CoreLogic Correspondent Validation Program (“CCVP”) and receiving a “Pass” are NOT subject to the LTV/CLTV reduction portion of CMB’s Declining Markets policy.  CCVP will be ran by CMB to determine if the LTV reduction is able to be waived.

Depreciating Market Determinations:

A county is determined to be in a depreciating or declining market if any of the following are present:

• County is shown on the CMB Depreciating Markets Lists

• Appraisal has “declining” marked in Property Values section and/or with comments referencing declining values

Depreciating Market Classifications:

• Moderate (and NO appraiser indication of depreciating market conditions) – no additional requirements; use prudent underwriting judgment

• Significant (or appraiser indication of depreciating market conditions) – 5% LTV/CLTV reduction requirements for FHA loans

• High (or appraiser indication of depreciating market conditions) - 5% LTV/CLTV reduction requirements for FHA loans;

Appraisal Requirements

Standard appraisal requirements apply. Appraisals marked as “declining” will continue to be given additional scrutiny and prudent review to ensure the value is supported by the most recent sales and market data and that all the comments from the appraiser are taken into consideration.

• Agency Loans: Standard appraisal requirements apply or as required by Desktop Originator (DO)

• FHA loans: Standard appraisal requirements apply as required by FHA.

LTV/CLTV Reduction Requirements

Agency Loans (Excludes FHA/VA):

• No reduction to LTV/CLTV is required for Agency Loans.

FHA/VA Loans

• 5% LTV/CLTV reduction required if county is classified as Significant or High

 

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