Case Study: Loan 1373 – When Lender Guidelines Change Mid-Process

Loan 1373 – Matan, focusing on lender guideline changes (PA $300K minimum and general $115K floor):

📘 Case Study: Loan 1373 – When Lender Guidelines Change Mid-Process
Borrower: Matan • Refinance with Cash Out • Pennsylvania • Lender #2436

The Situation

Matan, an experienced investor, submitted a refinance application for a two-property portfolio in Pennsylvania. The original estimated combined value was approximately $194,000, with a desired loan amount around $126,000. After providing documents, confirming the title company, and starting the appraisal process, the borrower was fully engaged and responsive even transferring funds for the appraisal himself when the payment portal failed.

The Turn: Treasury Department Guideline Changes

Midway through the underwriting process, Lender #2436 issued an internal policy update from their Treasury Department:

Minimum property value in Pennsylvania: $300,000

Minimum loan amount in any state: $115,000

Matan’s deal, unfortunately, fell short of both. Despite moving forward with documentation, underwriting, and appraisal prep, the lender abruptly placed a funding hold due to the updated internal policy — after weeks of processing.

Why This Happens

Lender underwriting guidelines often change based on Treasury department strategies, risk thresholds, and market trends. In this case:

The Treasury department raised minimums to improve capital efficiency and reduce underwriting exposure in lower-valued markets.

This change was not announced publicly it was relayed to our team after weeks of follow-up and pressure from the borrower.

The borrower’s estimated value of $194K was too far from the $300K requirement, prompting an immediate pause.

😡 Borrower Frustration & Timeline Breakdown

Despite excellent borrower cooperation, including:

Full document submission by May 30th

Regular follow-up

Willingness to proceed with risk

The appraisal was not sent for payment until June 18th, and even then, only after borrower escalation.

Matan’s key concerns:

Delays of 3+ weeks with no appraisal progress

Terms changed before value was verified

Missed opportunities due to prolonged wait

The Pivot

To protect the borrower’s investment of time and funds:

Nadlan Capital halted the appraisal

We are negotiating a refund

Our Auction Team is seeking new offers from other lenders who do not have the $300K PA requirement

Matan may reuse the appraisal (if completed) for another lender, pending AMC transfer approval.

Lessons for Investors

Guidelines Can Shift Without Warning
Internal treasury policies can override existing offers.

Know Your Market Limits
Pennsylvania and other “low-value” states are more exposed to minimum thresholds.

Speed Matters
Inconsistent lender responsiveness can cost you weeks and opportunities.

Have a Backup Lender Ready
Working with a team like Nadlan Capital ensures fast redirection when deals hit roadblocks.

Use Appraisals Wisely
Ask if your appraisal can be reused with another lender before paying.

Final Thought

This case is a reminder: underwriting is dynamic, and even approved deals can fall apart if a lender changes the rules midstream. That’s why Nadlan Capital leverages an auction system with 3,000+ lenders, ensuring multiple options so you’re never stuck when policies shift.

🔗 Learn more at NadlanCapitalGroup.com
📥 Start your own mortgage auction today and let lenders compete for your deal.