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11 Mar

What lenders think about grow-ops


Posted by: Aneta Zimnicki

March 11, 2013. Got quoted today in Mortgage Broker News, about registering former grow-ops with the regulatory authorities.  Not a good idea, in my opinion, it will narrow lender choice and hurt real estate investors and innocent home buyers.  A properly remediated property should not be a concern to a lender, and should not be an instant decline.  This is such a junior, knee-jerk approach to lending, not looking at the whole picture.  There is terrible stigma associated with former grow-ops with lenders (I stress fully remediated ones, not ones that are fraudulently renovated covering up remaining issues, that is certainly a valid concern for a lender).  This is not fair to the law-abiding consumer.  Why should the consumer be punished with higher rates, if the property is in good standing?  Having the registration will further worsen the stigma, the property may forever be in the alternative lending space, regardless of the physical issue of remediation being resolved, just because it is on some list.

Based on the news story about this matter, it seems that with proper due diligence a consumer can find out if property is a former grow-op.  In my opinion,  a redundant registration (at taxpayers costs, of course!) is not value add.  A good consumer and real estate investor would use a diligent realtor, home inspector, renovation contractor, lawyer, and can also do their own due diligence.  A registration of any kind will not protect people from fraud and criminals.  Criminals always go around the system.  This is a fact of life!

Check out my quotes in Mortgage Broker News

Here is the story, giving you more context