Just got out of a Bangor Savings Bank /Gateway Title seminar here in Houlton ME on title insurance issues and new tighter bank regulations for appraisals, approvals, mortgage insurance,etc. Probate, divorce, added documentation checks, subdivision questions...all effect the title, insurability and ultimate financing operation by any bank. If you thought a thirty day turn around time with a bank loan would be getting even faster, think again. Banks are not doing closings thru their drive thrus. If you thought trying to do things with lines of credit and juggling properties thru a commercial product reduced paperwork and reduced sharp edge programs, restrictive adjustments happening there too. And lots of realtors, bankers, underwriters and attorneys all trying to get their minds around the new layer of changes.
The added scrutiny to tighten up and protect the consumer just got racketed up a notch. Add to it more confidentiality, more protections, more regulations and getting the money from the bank has more obstacles to clear for everyone involved prompted by the sour assets that are a hot potato these days. New hoops for appraisers to leap thru, special training all the way around to complicate the process. So if you have a property where the owner does not need the money, like say in the case of an estate sale. And say there is only one or two family members that inherited the place, you might consider turning that property sale into a nice annuity with owner financing for the heir(s). Bank avoided, no appraisal, custom made payments that may stop once the buyer's other home sells, which it will. Better rate than the bank for the buyer and savings in closing costs. Better return for the seller than the interest rate they would get with a CD parked in a bank account with the first mortgage on that property for collateral. IN a market like Houlton Maine where you can buy a home for in the $30's, $40's, $50's that you would want to live in, the numbers work. For the neighborhoods in other parts of the planet where the price tag has lots of extra zeroes hanging from houses, this option may not be as good a risk or practical.