The buyer owns their current home free and clear, not a problem right? Not so fast red rider. The banks are now requiring the mortgage company run a Property Profile, a service available from title companies. This means an additional closing fee of up to $150 to your buyer.
This fee is not considered a title fee, it is a lender fee and will be included in block #1 of the GFE.
The Property Profile will indicate any recorded liens on the property. This includes private money or seller carrybacks. With this just going into effect some deals are likely to get kicked back due to non-disclosure by the buyer on the application. Often times the buyer doesn't consider it a mortgage on the property unless held by a bank. Private money and seller carrybacks don't show up on credit reports and this is a way for the banks to protect themselves and be sure they have underwritten the file properly with due diligence.
Just one more change in the ever changing landscape of mortgage lending.
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