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Old 12-04-2014, 06:39 AM
 
7 posts, read 11,801 times
Reputation: 14

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Quote:
I can suggest you file a complaint with the CFPB
Thank you SmartMoney,
Tempting. Tempting.

Quote:
The appraisal would have been acceptable with a 30% down payment,
Thank you oldtrader,
We have liquid money to hit this or better. We were still denied.

Quote:
It is amazing on these threads, people say report this to the authorities, of go get a lawyer and sue someone when no one has done anything wrong.
Honestly, the reason I started this thread is I'm trying to determine if anyone has done anything wrong. This is my first refinance (2nd attempt at same bank) and I'm just learning the ropes. To me it really seems like something has gone wrong, maybe not intentional, perhaps unintended consequences. And I am trying to see if I have any recourse to get the $800 back. However, it is sounding more and more like I should have known better, and I do not have any recourse. I can take this as a lesson learned, but it still seems very wrong to me.

Quote:
Try seek another mortgage company who is willing to take your business. I usually refi with another lender, not the exact same one that the loan was originated.
Thank you ameridreamNoT,
Absolutely. I thought I was being a loyal customer to bank #1 by keeping it in the same place. However, I'm realizing that bank #1 is just a local branch of a larger bank. And while I have a good relationship with the workers at this local branch, they are beholden to the overall larger bank policies. Bank #2, who I'm now starting to work with, seems more like the ideal local bank situation. Wish us luck with moving forward with bank #2!

And of course, if anyone has any additional thoughts on getting the original $800 back - I'm all ears. Or if you have additional thoughts on how there was no wrongdoing - I'm interested too, maybe if I understood how this is fair it would sting less. Thanks again for your feedback.
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Old 12-04-2014, 06:45 AM
 
Location: MID ATLANTIC
8,660 posts, read 22,832,313 times
Reputation: 10485
Quote:
Originally Posted by oldtrader View Post
The lender is not allowed to contact the appraiser, and that is set in stone by laws since the housing bubble burst. The appraiser does not know what type of loan is involved. They are to make an appraisal using the best information available, (which in this case there was only one 4 plex sold to use as a comp so as 3 comps are required the appraiser used the only ones available) with no knowledge of the details of why they are making an appraisal. The appraisal would have been acceptable with a 30% down payment, but not for an under 20% down. The lenders the banks sell their loans to, would not accept it, nor would the mortgage insurance company that is involved.

It is amazing on these threads, people say report this to the authorities, of go get a lawyer and sue someone when no one has done anything wrong. There are times for one or both of those solutions is appropriate, but not in this situation.

And there is no such thing as a desktop appraisal. What that is, is an estimate of fair market value, but is not an appraisal. An appraisal is much more complicated and much more information is needed, including a visit to the subject property prior to doing comps. The appraiser has to actually personally gather the information on the property being appraised.

Reason Why. About 30 years ago, someone wanted to exchange a 3,600 sq. ft. home as a down payment on a 6 unit apartment. It turned out to be 1,200 sq ft first floor, a 1,200 sq. ft unfinished basement, and a 4 car garage of 1200 sq. ft. You do not count the garage as part of the sq. footage of a home, and the multiple listing service had the home as all finished. The home was worth less than half of what the property was listed for. Turned out, the listing was done by a brand new agent, that had no idea of what she was doing. I am not picking on women agents, because I have seen men do way worse than this when listing property.
Well, I guess our loan panel will be shocked to hear a desktop is not available.....we don't use an AMC, but a rotation service, but it was easy enough to find somewhere to order a desktop with a past AMC Desktop Appraisals, ValueSafe Desktop Program ,Desktop Appraisal Program there are many tools available to the lender - you know that UCDP, where appraisal data is collected? (Uniform Collection Data Portal - every appraisal has data on the transaction sent to Fannie and Freddie into a large data base - this data is available to the lender at the time of underwriting the appraisal and it's easy to spot a transaction that ignored or dismissed more relevant comps). We are already seeing the benefits of the datasets being turned in. It won't be long before AVMs (automated valuation methods) will cross-check most appraisals, and perhaps, replace lower LTV appraisals.

I find it hard to believe the appraiser does not know what kind of financing or the details as I thought they were require to analyze the purchase contract as part of the report.

They new regulations had many unintended consequences and dismissing common sense took the lead, followed by sharp paycuts for most of the remaining appraisers - unless they scrambled to start an AMC. Some, eventually recovered, but most I know, did not - at least nowhere near to prior levels. So yes, we can't let the regulators off the hook by ignorance.....they need to see their everyday consequences.
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Old 12-04-2014, 08:04 AM
 
179 posts, read 267,487 times
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I understand your frustration. When we built we didn't give a thought to comps. We bought in farmland and there were 10 acre lots, 5 acre lots and 1 acre lots. We were thrilled to get to build our custom home. When we went to sell many years later we learned of the no comps line.

If we had been in a tract house or condo no problem, but when you have a custom home you need to have taken 20 of your best buddies along to build their homes exactly like yours or you have no comps.

No one had the exact square footage because of the fact they were custom homes. Most had different builders. I didn't understand why since these people were professionals at real estate that the only way they could do comps or appraisals is if all homes were exactly alike.
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Old 12-04-2014, 08:27 AM
 
7 posts, read 11,801 times
Reputation: 14
Hi elliott01,
Thank you for sharing your story. I am sorry this sort of thing happened to you too!!! Knowing this has helped me a lot because I was troubled for 2 reasons: 1) this is not a good situation, but also 2.) I didn't know if I was alone and someone was taking advantage of me... or if this is a systemic problem. Seeing that something similar has happened to you, I can feel better that some unusual trickery was not happening in my case. What ended up happening? Where you able to sell? Do you know if any potential buyers paid for appraisals that were rejected later by underwriters?
Thank you again!

Last edited by Lewisburg; 12-04-2014 at 08:43 AM.. Reason: actually double posted same thing... here is the new message
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Old 12-04-2014, 08:39 AM
 
Location: Southern California
4,453 posts, read 6,774,523 times
Reputation: 2238
Quote:
Originally Posted by oldtrader View Post
And there is no such thing as a desktop appraisal.

What that is, is an estimate of fair market value, but is not an appraisal.
You missed the point.

Also how can you say there is no such thing as a desktop appraisal but then define it?
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Old 12-04-2014, 08:50 AM
 
7 posts, read 11,801 times
Reputation: 14
Quote:
You missed the point.

Also how can you say there is no such thing as a desktop appraisal but then define it?
Hi thelopez2 and oldtrader,
I don't mean to jump in between your exchange, but this makes me wonder... should bank #1 have offered something like a desktop appraisal, or at least have any form of warning system to let customers know they are about to lose $800? Because this did not happen, is this grounds for asking for a refund - or issuing a complaint? Thank you again!
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Old 12-04-2014, 08:52 AM
 
Location: Southern California
4,453 posts, read 6,774,523 times
Reputation: 2238
Quote:
Originally Posted by Lewisburg View Post
Hi elliott01,
Thank you for sharing your story. I am sorry this sort of thing happened to you too!!! Knowing this has helped me a lot because I was troubled for 2 reasons: 1) this is not a good situation, but also 2.) I didn't know if I was alone and someone was taking advantage of me... or if this is a systemic problem. Seeing that something similar has happened to you, I can feel better that some unusual trickery was not happening in my case. What ended up happening? Where you able to sell? Do you know if any potential buyers paid for appraisals that were rejected later by underwriters?
Thank you again!
You are not alone, I've seen this in rapidly appreciating markets, unusual sized properties that didn't fit the neighborhood, areas where a certain type of property doesn't get sold too often, yet they exist.
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Old 12-04-2014, 05:28 PM
 
9,891 posts, read 11,704,117 times
Reputation: 22085
Quote:
I don't mean to jump in between your exchange, but this makes me wonder... should bank #1 have offered something like a desktop appraisal, or at least have any form of warning system to let customers know they are about to lose $800? Because this did not happen, is this grounds for asking for a refund - or issuing a complaint? Thank you again!
When it comes to making an appraisal on a property, certain steps must be followed. The bank has no way of knowing what will be the results of an appraisal. They cannot make an advance guess what will happen in the appraisal. By laws and regulations, the appraiser is done without any information about the property, but it's address/legal description. The regulations require this, because back before the real estate bubble burst, banks were getting appraisers to appraise the property at a price they could make the loans. A desk top appraisal, is the type of program used by real estate agents and others that will estimate the value of the property, but can be considerably different than an appraisal when it is done properly. It is just a guess, and depends on how accurate the information is that is entered into it. That is why your bank would not use something like this to estimate what an appraised value would be. They can only rely on an independent appraiser randomly selected to keep a collusion between a lender/buyer and the appraiser.

When you want a preferred low rate of interest, etc., there has to be a certain amount of equity in the property to get it. It is not your fault, it is not the lenders fault, and it is not the appraisers fault there is insufficient equity. All the appraiser could do, is use the best information available to come up with an appraised value. The problem you have, is that an actual appraisal said there was not enough equity, to give you a preferred rate of interest, which is really reserved for a higher equity level. Without an appraisal by an independent appraiser, the lender had no way of knowing if you had the equity or not.

Quote:
I understand your frustration. When we built we didn't give a thought to comps. We bought in farmland and there were 10 acre lots, 5 acre lots and 1 acre lots. We were thrilled to get to build our custom home. When we went to sell many years later we learned of the no comps line.

No one had the exact square footage because of the fact they were custom homes. Most had different builders. I didn't understand why since these people were professionals at real estate that the only way they could do comps or appraisals is if all homes were exactly alike.
Appraisers, appraise property every day, that does not have the same measurements, not the same style, nor are the same exact quality, but within a similar local neighborhood. But there has to be properties that they can compare with.

Example: We just had an appraisal for estate planning purposes on our home. It is a 3,700 sq. ft., 4 level home (lowest is garden level not a basement) very contemporary home and very unique with lots of custom features with soaring 25 ft. ceiling in living room as an example and a lot of stone work inside and out. It sits on 5 acres across the street from nicest area of town, separated from the town by a county road. I knew I could come very close within $20,000 of what the appraised value would be, but needed an official appraisal. It had not been appraised for 9 years. This home, is completely different in style, size, and everything else from all other homes in the neighborhood.

I missed it by $5,000 so I was very close to my estimate. I rounded to even $5,000 and the appraiser rounded it by $10,000, which accounted for our difference. I was very happy with the appraisal. Of course I have been putting values on property for over 40 years, so I am not an amateur at doing it.

In your situation, they were trying to tell you that the appraiser could not justify the price you were selling it for, and would not make a loan on the property at that price. Telling you there are no comps to justify that price, is an excuse to turn the loan down as they felt the selling price was higher than it was worth, and you could not find other similar property to justify the sale price you wanted.

Just as the case of the OP. They were using the comp problem, to let them know that they could not get an appraisal high enough to give them an equity that would qualify him/her for the low rate of interest he/she wanted.

Appraisers today, have very rigid regulations on how to appraise a real estate property. Not everyone is happy with the appraisal, but it will be the real value of the property.
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Old 12-04-2014, 05:55 PM
 
Location: MID ATLANTIC
8,660 posts, read 22,832,313 times
Reputation: 10485
Quote:
Originally Posted by Lewisburg View Post
Hi thelopez2 and oldtrader,
I don't mean to jump in between your exchange, but this makes me wonder... should bank #1 have offered something like a desktop appraisal, or at least have any form of warning system to let customers know they are about to lose $800? Because this did not happen, is this grounds for asking for a refund - or issuing a complaint? Thank you again!
No, this would not normally be offer, but an alert loan officer would have poked around and made a few calls....at least to a Realtor familiar with the neighborhood. I would have ordered a desktop or AVM if all else with the file was in order.

OP, you are far from being alone - we have had a high incidence rate mirroring your exact dilemma - there are many unique properties out there, maybe not multi-family units, but we do see them on a frequent basis. It's a two-fold issue, when you tighten down on requirements and/or laws in a declining market, it's like cutting off your hand before you try to sign your name with that same hand.

We know how we got here, but imagine what our market s would be like if we clamped down and overhauled appraisal guidelines in an appreciating market.
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Old 12-05-2014, 01:09 PM
 
5,340 posts, read 14,095,302 times
Reputation: 4699
Quote:
Originally Posted by Lewisburg View Post
Correct. We are a small university town, population under 6,000. There are mostly single family homes here. But of course we have our share of 2plex, 3plex, and 4plex, here, but only a handful or 2 trade hands per year. I think the appraiser used 1 4plex and 2 2plexs for the appraisal.
Sounds to me like you have a crappy bank. Do you do your personal and business banking with this bank? If so I would pull out.
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