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Old 07-15-2012, 10:11 AM
 
Location: moving soon
32 posts, read 46,618 times
Reputation: 27

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I was applying for refianicing.......the lender took my information and proceeded with the appraisal this cost me $425.00. I was applying for a conventional loan at 3.75% this wasn't locked in, my current rate is 5.25%......after 3 weeks of the lender not filling out the correct amount on the paperwork he had the original cost of the house way off and a few other things the loan was processing. Then 5 weeks into the loan the lender informed me the conventional loan wouldn't go through because the house is a log house, he said he overlooked that part during the review wasn't until appraisal came through that he realized this............ I've refinanced before without this ever being an issue. The lender told me he could do the conventional, but it would be above 5% and an FHA would be the better route. The FHA came back at around 3.1% with a mortgage insurance for 5 years that would cost around $200.00 each month this would be an extra on top of house insurance.

I took this to my mortgage company who up until now wasn't giving much of a break offered me a better way to go without refinancing and the appraisal has become something I can't use and feel the lender could've picked all options before spending my money. My question am I out of line and don't have any recourse or should I fight to get my appraisal money back and is it even something that should be refunded?

Thanks for any help............
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Old 07-17-2012, 04:41 AM
 
Location: MID ATLANTIC
8,067 posts, read 19,790,656 times
Reputation: 9130
Both types of financing require similar comps. Something is not adding up here, an FHA appraisal is tougher than a conventional appraisal. Are you sure there's not other issues, like credit or qualifying? If all is fine, it's the investor that will not accept a log home (called an overlay) and he was not able to find a home for the property.

Let's put it this way - as of right now, lenders are not required to refund appraisals that don't work. However, I'm willing to bet that's next........if it does happen, add a week or two to the process with higher rates to offset the occasional refund.
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Old 07-17-2012, 07:32 AM
 
Location: moving soon
32 posts, read 46,618 times
Reputation: 27
Quote:
Originally Posted by SmartMoney View Post
Both types of financing require similar comps. Something is not adding up here, an FHA appraisal is tougher than a conventional appraisal. Are you sure there's not other issues, like credit or qualifying? If all is fine, it's the investor that will not accept a log home (called an overlay) and he was not able to find a home for the property.

Let's put it this way - as of right now, lenders are not required to refund appraisals that don't work. However, I'm willing to bet that's next........if it does happen, add a week or two to the process with higher rates to offset the occasional refund.

You know I thought it sounded strange. My credit is good and the home is actual logs not an overlay. I've refinanced this home a couple of times without this being an issue. He said he didn't know until the appraisal came through that it was a log house that seemed odd to me, this means from the beginning he didn't know what he was financing it could've been a mobile home.

My original mortgage company told me the FHA would be tougher they couldn't see why that direction or why the house wouldn't be excepted for conventional. This guy told me it would be easier just more paper work for him.

As far as that being next........... probably so, most certainly with lenders like this, he wasted my money I didn't even need the appraisal without the loan. Guess on the bright side I know what my house is worth...........

Thanks for trying to answer....... I guess it's up to the lender, many people are not into giving back money they didn't earn these days. He admits he did no wrong.
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Old 07-17-2012, 07:51 AM
 
Location: Austin
7,205 posts, read 18,774,376 times
Reputation: 9808
Quote:
Originally Posted by Candy~O View Post
... the home is actual logs not an overlay.
By overlay, it means there are specific criteria for a loan to get approved and some investors have "overlay" criteria, stricter (more strict) criteria. He wasn't saying your house was an overlay.
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Old 07-17-2012, 10:01 AM
 
4,953 posts, read 12,467,133 times
Reputation: 3737
If there are no recent log home comparable sales in your area, the property would be deemed 'unique' and un-financible in the secondary market. Is a log home typical for your area?
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Old 07-17-2012, 04:33 PM
 
Location: moving soon
32 posts, read 46,618 times
Reputation: 27
Quote:
Originally Posted by FalconheadWest View Post
By overlay, it means there are specific criteria for a loan to get approved and some investors have "overlay" criteria, stricter (more strict) criteria. He wasn't saying your house was an overlay.
Thanks for clearing that up for me.........
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Old 07-17-2012, 04:53 PM
 
Location: moving soon
32 posts, read 46,618 times
Reputation: 27
Quote:
Originally Posted by TimtheGuy View Post
If there are no recent log home comparable sales in your area, the property would be deemed 'unique' and un-financible in the secondary market. Is a log home typical for your area?
No, I live in an area with many log homes matter of fact, the appraisal came back quickly because of that. The lender was surprised also at so many to compare too, guess he doesn't deal with many in Florida.

I've emailed him and asked what happens when a loan falls through due to lender not being able to beat what I have now and spent the appraisal money before he knew what he was dealing with, his response was........... "Every one makes mistakes and he didn't know it was a log home and he can get the conventional it's just going to be higher than where I am now." Then he asked me to understand that even I've probably made mistakes like this............ I haven't responded back yet, No...... I haven't spent someones money without giving something in return.

Then he said "the FHA was his best bet and sorry if I felt he couldn't do the job, he's been at this for 15 years and knows more about loans than I do."

Feel like saying "then why did you not know it's a Log Home???" I feel like I'm just going in circles with this guy. I don't think a refund is in the cards, but to think they can spend my money and not give me a better rate on my mortgage is a rip off, after all it's what I applied for.
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