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Is the sun setting on our small towns, or they can kill a deal but can they kill a town?

August 13, 2009


Is the sun setting on our small towns? Another curve ball in the appraisal and banking process, they can kill a deal but can they kill a town? I heard something yesterday that really got me scratching my head at first, then caused a shiver down my spine, then set me to wondering if appraisals and banks can cause the death of a town.

Picture BOA, yes, we all can do that. (I may prefer not to, but I am just the storyteller.) Picture a very well qualified home owner (our hero), doing business with BOA for a long time. Lots of money in the BOA vaults, excellent credit rating, owns properties free and clear, has 2 mortgages on properties in Arizona. Even with the downturn in the market, there still should be equity in the homes he owns. I can’t stress enough in my story about the fact our hero is more than qualified, this is not a first time home buyer story at all. Or a story about some questionable real estate investor.

Our hero decides it is time to get a better rate on the mortgage in Arizona. The mortgage is a few years old and at the time the rate was great, but why not take advantage of his excellent credit scores and relationship with BOA? No reason not to, right?
Old Head stones
Way back in February the process was started. MONDAY our hero was told no deal. How could this be? The property is not an eyesore, it is in decent shape. Our hero is certainly well monied with excellent credit scores. What could the problem be?

No homes have sold in the past year in this tiny town, therefore BOA said the appraiser could not appraise the property, consequently BOA would not re-finance the property. BOA did NOT say the current mortgage was more than the house was worth, and I don’t believe this is true as there was a substantial amount of equity in the house when he made the initial purchase which was well before the market spiraled out of control. That would be understandable if they had said that.  Understand our hero was not pulling money out of the property, our hero was only refinancing to get a better rate!

This caused me to wonder, could this cause the death of a small town with not much real estate activity? If we have a viable buyer for a property in a town with not much activity, would the bank refuse to finance because an appraiser said they didn’t have any comps? What if you are asked to list a property in a small town with no activity in the past year. We all have problems coming up with real numbers when we do CMA’s at times, do we tell the prospective seller that we are sorry, we can’t comp the house and therefore can’t put it on the market for them? And what about those people who purchased the great American dream in a small town and IS now upside down on their mortgage. Will the lenders refuse to renegotiate the terms of the loan because there has been no RE activity in the area? Inquiring minds want to know.

(Our hero pulled all his accounts from BOA the following day.)


Are you looking to buy a home or sell a home in the greater New Milford area? Please contact me or visit my website to find out more.

Homes for sale, greater New Milford CT.

Local area information, New Milford, Washington, Roxbury, Kent, Bridgewater, Sherman and Warren. Why you should be looking for a home here!

© 2009 Andrea Swiedler. Unless otherwise noted, the content, both written and in pictures, is the property of Andrea Swiedler. If you wish to use something you see here, please email me ( with your request. Most likely I will oblige, with a link back to my original content as well as an acknowledgment. Although imitation is the highest form of flattery, please let me know before you decide to bestow this form of flattery on me! Thank you.

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