Consider a situation where a loan officer examines the degree of collateralizability of a real estate.
For example, one could compare:
- Sturdiness: wood v. brick.
- Flood/Tornado Plain: more vulnerable to flood/tornado v. less so.
My Question (a): Would you say a loan officer views the former choice in (2) as an element for less collateralizable real estate? In my previous question, the home insurance was discussed. Lenders would not extend a mortgage to a home buyer unless a proper home insurance is purchased. Hence, the bank hedges fully against such natural disasters, so would you consider homes in the Midwest as opposed to homes in Maine less collateralizable?
My Question (b): Now consider (1), holding all other factors the same for two homes: one is wood and brick. Would this factor into a loan officer's evaluation of the home to be less collateralizable? In other words, does the structural durability factor into the collateral calculation?