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  #1  
Old 07-20-2011, 10:05 AM
Hugh Hill Hugh Hill is offline
 
Join Date: Apr 2002
Location: Guntersville, Alabama
State: Alabama
Professional Status: Licensed Appraiser
Posts: 60
Default Borrowers Complaining about Appraisal

Hey Guys,

I've been appraising a long time but more recently I'm having more and more
borrowers calling and complaining about the values and giving me the sad story.

Just curious.... I'm trying to come up with way to maybe cut down on the calls if possible. Its getting old. Had 3 just the past 2 days.

Do you explain at the appointment that your not allowed to talk values with the borrower?
Do you give the borrowers anything stating that?

Any suggestions? I'm just trying to come up with something. Also, this discussion maybe it will help others in the process.

Thanks for your help and suggestions.

Hugh
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  #2  
Old 07-20-2011, 10:18 AM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is online now
 
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 37,654
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You might try a little postcard sized handout

Quote:
An appraisal was ordered by your lender. They have the sole authority to order the report and your appraiser is paid directly by the bank although you may have to reimburse the bank that cost. We are not allowed to disclose the results directly to you but the bank can provide you a copy of the appraisal report. In the event you have questions about or find errors on the report, please direct those to the lender. Again, we cannot and will not discuss the report with anyone except our client. If you wish to disclose anything about the property then please do so during this inspection. Post-report changes could result in additional costs that may be passed on to you. Our report is not a substitute for a home inspection. Your privacy is assured and the contents of our report are not provided to anyone except the client or their agents.
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  #3  
Old 07-20-2011, 11:09 AM
Noreen Noreen is offline
 
Join Date: Feb 2011
State: New Hampshire
Professional Status: Certified Residential Appraiser
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Do not personally get sucked into this, all communication must be through your lender. PLEASE REMEMBER THE LENDER IS YOUR CLIENT!!! You do not want to put yourself in this position.
  #4  
Old 07-20-2011, 11:09 AM
Don Clark's Avatar
Don Clark Don Clark is offline
 
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Location: Virginia Beach, Virginia
State: Virginia
Professional Status: Certified Residential Appraiser
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Quote:
Originally Posted by Terrel L. Shields View Post
You might try a little postcard sized handout
Very nice

I try to avoid having the buyer at the property when I do my appraisal inspection. I also try to avoid having the seller there or the realty agent if possible.
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  #5  
Old 07-20-2011, 11:32 AM
Mary Tiernan Mary Tiernan is offline
 
Join Date: Dec 2003
Location: Michigan
State: Michigan
Professional Status: Retired Appraiser
Posts: 2,321
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My last commentary to the borrower includes a summary of their rights to have a copy of the appraisal, and that they must obtain that from their lender. I go into a limited summary of the appraisal rules as adopted by my state and typical lender requirement that they be the named client on the report, and that I am bound to a client confidentiality.

I then state that it is now back to my office, where the real work begins.

Have had very few problems since adopting this strategy.
  #6  
Old 07-20-2011, 12:20 PM
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Smokey Bear Smokey Bear is offline
 
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Location: The "OC" in Republican Land (Oh no!)
State: California
Professional Status: Certified Residential Appraiser
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Quote:
Do you explain at the appointment that your not allowed to talk values with the borrower? Do you give the borrowers anything stating that?
Yes to both. My notification also states that they shouldn't rely on the cost approach for their insurable value, etc. AND I have them sign a copy saying they have received and read it.
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  #7  
Old 07-20-2011, 01:20 PM
Hugh Hill Hugh Hill is offline
 
Join Date: Apr 2002
Location: Guntersville, Alabama
State: Alabama
Professional Status: Licensed Appraiser
Posts: 60
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Thanks guys for all the response.

If I get this straight.... Some of you guys have letter that you give to the borrower at the time of inspection stating what their rights are and what it takes to get a copy of the appraisal.

Does anyone mind sharing a copy or copy and paste something here.

Hugh
  #8  
Old 07-20-2011, 04:13 PM
Smokey Bear's Avatar
Smokey Bear Smokey Bear is offline
 
Join Date: Dec 2004
Location: The "OC" in Republican Land (Oh no!)
State: California
Professional Status: Certified Residential Appraiser
Posts: 12,470
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Start with this:
Quote:
I understand that the payment of the appraisal is not dependent on the appraiser reaching a predetermined value. I understand that I am entitled to a copy of the appraisal report, which I may request from my broker or lender.

I understand that under the Confidentiality section of the Ethics Rule of the Uniform Standards of Professional Appraisal Practice, the appraiser is under a strong obligation to the client, the lender, and may not discuss the results of the appraisal with others, including the borrower, or provide copies of the report to others, without written permission from our client.

I understand that if a cost approach to market value is provided, it should not be used to determine insurable value. I understand that if the cost approach is used to determine insurable value, the property may be over or underinsured, and that the appraiser has no liability for insurable value.

Residential Borrowers May Receive Copy of Appraisal
Under 12 U.S.C.A. Section 169 (e), part of the Federal Equal Credit Opportunity Act, a residential mortgage applicant has the right to receive a copy of the appraisal report from the lender. To receive the copy of the appraisal report, the borrower must request it in writing from the lender within ninety days of submitting the loan application. The December, 1991 amendments to the Federal Equal Credit Opportunity Act, known as 12 USCA Section 169 (e), require a lender to provide, on written request, a copy of the appraisal report to any person who applies for a residential mortgage.
Important Notes
  • This law applies to nearly all real estate secured residential mortgage lenders, including banks, S&Ls, credit unions, mortgage bankers, mortgage brokers, mortgage originators, etc.
  • Rules promulgated by the Federal Financial Institutions Regulatory Agencies allow borrowers a 90 day period during which to file the written request for a copy of the appraisal.
  • The lender must supply a copy, not the original appraisal report.
  • The residential borrower, or potential borrower, must obtain the appraisal copy from the lender, not the appraiser.
  • Only the borrower, or potential borrower, has a right to receive a copy of the appraisal from the lender. Sellers, brokers, and other parties who are not the borrower have no right to obtain a copy of the appraisal.
  • The lender who ordered, accepted delivery and based a business decision on the appraisal is the appraiser's client, regardless of who paid for the appraisal, or when, or how. The appraiser must comply with the client confidentiality provisions of the Uniform Standards of Professional Appraisal Practice.
  • The appraiser has no obligation to discuss the appraisal with the borrower, or proposed borrower. The borrower is not the client. The appraiser must comply with the client confidentiality provisions of the Uniform Standards of Professional Appraisal Practice.
The appraiser may not reissue, retype, re-certify, update, transfer or otherwise pass an appraisal report prepared for one lender/client to another lender/client. The second, third, etc. lender/client needs to order a new appraisal.
I just grabbed this from other forms I have, but it's a good start.
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  #9  
Old 07-20-2011, 05:10 PM
BOCK FOLKEN BOCK FOLKEN is offline
 
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Location: N. Central Florida
State: Florida
Professional Status: Certified Residential Appraiser
Posts: 579
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Most of these "after the fact" value complaints are people whining about the market. Unfortunately many of them blame us.

I typically tell the borrower that my appraisal is "AN OPINION" of value, based on my knowledge of the market and research of recent local sales and listings. My OPINION is not the only opinion available nor is it absolute. Depending on the situation, I sometimes throw in that appraisers make mistakes just like eveyone else. Then I tell them if they feel I have made an error of fact or analysis that could change my OPINION, they should indicate same to their lender and request a reconsideration of value based on the specific items they question.

That stops about 95% of the complaints dead in their tracks...mainly because they have no basis upon which to complain except they don't like the value opinion.
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Last edited by BOCK FOLKEN : 07-20-2011 at 05:12 PM. Reason: clarify
  #10  
Old 07-21-2011, 10:13 AM
Oh No Not Him Oh No Not Him is offline
 
Join Date: Jun 2006
State: Maine
Professional Status: Certified Residential Appraiser
Posts: 426
Default

Quote:
Originally Posted by Hugh Hill View Post
Hey Guys,

I've been appraising a long time but more recently I'm having more and more
borrowers calling and complaining about the values and giving me the sad story.

Just curious.... I'm trying to come up with way to maybe cut down on the calls if possible. Its getting old. Had 3 just the past 2 days.

Do you explain at the appointment that your not allowed to talk values with the borrower?
Do you give the borrowers anything stating that?

Any suggestions? I'm just trying to come up with something. Also, this discussion maybe it will help others in the process.

Thanks for your help and suggestions.

Hugh

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