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So, can I, as a buyer, call the Appraisal Management Company to expedite? The Appraisal report says to contact Loan Officer with any questions but it sounds that the LO is in the same boat as me. The are not in control. They don't know when the response will come but they are hoping it's not going to be more than 48 hours, which we have allocated.
This can happen but hopefully vary rarely. It's not so much that underwriter doesn't like the value. The underwriter can't throw out an appraisal because it didn't meet the sales price.
However, it can happen that the underwriter didn't feel the appraiser supported the value conclusion adequately. An appraisal is an opinion of value and the appraiser has to be able to support that value.
There could have been problems with the age/distance of the comparables, the number or size of the adjustments used, inconsistencies of the adjustments, the final net/ gross adjustments, the type of closed sales used. As in arm's length sales versus liquidated sales or other potential non arm's length sales. Or all of the above on one appraisal.
In other words, the appraiser did not convince the underwriter that the value opinion made sense. Must have been a really bad appraisal though to have to go back to square one and get another appraisal . Or---
Was this an unusual property ? Like a one of a kind in a rural area ? There are some properties that require a really experienced local appraisal to figure out the value and an underwriter who understands appraising an oddball property.
The same thing happened to me yesterday. All conditions clear, appraisal question comes out of nowhere. Curious which bank/mtg company you had this come up with?
If an underwriter sees signs of sloppy work, they'll throw out the appraisal in a heartbeat. I had one last week, the appraiser put the comp (new construction) next door as 10 miles away. She also had it as an REO (not).....the list just kept going, and at one point, the UW lost faith with the competence and kicked the report. It was so bad, we sent it to the owner of the AMC, who replaced it with another appraiser and report for no charge.
The errors do not need to be as glaring as my situation, but if the underwriter loses confidence in the appraiser's ability, then they MUST throw out the appraisal. The collateral for the loan is 50% of the credit decision. The problem that I see is the loan officer and/or the processor should have noticed it before it got to the underwriter. Because mine was glaring, by the time my file got to the UW, we already had the 2nd one in the works and was turned in 2 days after the UW kicked it. But good processors and LO's know how to review a report and spot trouble.
As for the OP, I can guarantee the builder's lender would not be waiting 1 week on an appraisal condition. The builder isn't hootin' and hollerin' because he has no pull with your lender. The attitude here is you chose them, it's your problem. And this is something every buyer needs to consider when going outside. If you lose your lock, this is going to be very expensive.
The same thing happened to me yesterday. All conditions clear, appraisal question comes out of nowhere. Curious which bank/mtg company you had this come up with?
it was a small local lender. Thankfully, we closed on June 21st, the appraisal came back with an additional comp I guess.
Lesson learned - schedule the appraisal very early on in the process.
More than likely, the lender's underwriter(s) were ok with the file, and it was Cleared to Close by them - - which mean, it then goes to their Compliance officer, and perhaps also the actual investor on the loan (Wells, Chase, etc.) - - and somewhere in those two additional lines of review, somebody saw a red flag.
Think in terms of a Forensic Attorney, ten years from now, poring over a file in an attempt to get the entire balance of a loan, with interest and penalties, paid to the borrower because a little "i" wasn't dotted. It happens, and it, as well as the prospect of a Buyback or UN-investable loan, has resulted in additional review steps.
So, you are not Cleared to Close until you are sitting at the Title company, and have signed docs, and the wire has been released. It ain't over til it's over.
it was a small local lender. Thankfully, we closed on June 21st, the appraisal came back with an additional comp I guess.
If this is the case your appraisal may be invalid. Asking for an additional comp is in violation with Dodd Frank.
A lender can do 1 of 3 things: 1) accept the appraisal as-is; 2) Have a review done or 3) have a new appraisal done.
In my experience, the additional comp request has no bearing on the validity of the appraisal, but serves mostly to satisfy some issue within the UW own system.
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