Suppose a borrower is doing a cash$-$out refinance to get as much money as they can out of

their primary residence property. Then you see on the appraisal report that the house was

listed for sale in the last $12$ months and was actually on the market for $6$ months but didn$$t

sell. Then you also noticed that the appraiser also marked the box that said property values in

the area were $$declining$.$ What should the loan processor and$/$or underwriter do now?

a$.$ They should alert the loan officer to talk to the borrower because most lenders will

not want to do a cash$-$out refinance on a property in this situation.

b$.$ They should tell the loan officer to talk to the borrower about seeking other

alternatives and perhaps talk to a Certified Financial Planner or CPA since almost no

lenders would be willing to entertain doing this loan.

c$.$ Both $$A$$ and $$B$$ are correct and proper steps to take.

d$.$ They should do nothing. Treat this loan as if it were $$business as usual.$$ Ram it

through the system and hope no one in the Secondary Market who buys this loan will

notice anything wrong.