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  #1  
Old 09-16-2011, 08:16 PM
Rocky Mountain High's Avatar
Rocky Mountain High Rocky Mountain High is offline
 
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Default need comments to withdraw from assignment

I have an assignment for a refi. I have researched the data and know the subject value is going to fall below the most recent prior loan amount (2010) and prior sale price (2007), most likely a minimum of 20% due to market conditions. I know the borrower believes the home is worth 10-20% more than the prior loan amount and purchase price due to costs associated with some updating (items have a negative ROI).

I know that I can just move forward and spend 15-20 hours completing the assignment (it is a complex property/location), and I'll get paid, however I am never comfortable putting homeowners in the position of paying for something (appraisal) and getting nothing (except an appraisal of course). Please know, my client did not ask for a predetermined value, nor did anyone. Basically - I just want to withdraw from the assignment because I know too much, however need advise on how to do this tactfully / what to say, without making up a BS lie.
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Old 09-16-2011, 08:32 PM
Randolph Kinney Randolph Kinney is offline
 
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Quote:
Originally Posted by Christine Carlton View Post
I have an assignment for a refi. I have researched the data and know the subject value is going to fall below the most recent prior loan amount (2010) and prior sale price (2007), most likely a minimum of 20% due to market conditions. I know the borrower believes the home is worth 10-20% more than the prior loan amount and purchase price due to costs associated with some updating (items have a negative ROI).

I know that I can just move forward and spend 15-20 hours completing the assignment (it is a complex property/location), and I'll get paid, however I am never comfortable putting homeowners in the position of paying for something (appraisal) and getting nothing (except an appraisal of course). Please know, my client did not ask for a predetermined value, nor did anyone. Basically - I just want to withdraw from the assignment because I know too much, however need advise on how to do this tactfully / what to say, without making up a BS lie.
I would not withdraw. I would complete the assignment. Your client engaged you, not the borrower. The lender wants to know the current market value to make a mortgage finance lending decision and is paying you for it. If not you, then someone else.
  #3  
Old 09-16-2011, 08:37 PM
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Lee in L.A. Lee in L.A. is offline
 
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Who cares if the loan deal works or not. That's not your concern or worry.
Not what you're getting paid for.
If the borrower complains later, make them talk to the lender.
They have this wonderful appeal process.

So, do the appraisal, make it as bulletproof as you can.
Be ready to shoot down their appeal comps.
Sometimes you are the deal killer.

Such is life.
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  #4  
Old 09-16-2011, 08:37 PM
Tom Woolford Tom Woolford is online now
 
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You are not involved in the lending decision, and you have no idea what the equity is. Do the job you were retained for and let the underwriters do theirs.
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  #5  
Old 09-16-2011, 08:38 PM
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Calvin the Airedale Calvin the Airedale is offline
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Default

Quote:
Originally Posted by Christine Carlton View Post
I have an assignment for a refi. I have researched the data and know the subject value is going to fall below the most recent prior loan amount (2010) and prior sale price (2007), most likely a minimum of 20% due to market conditions. I know the borrower believes the home is worth 10-20% more than the prior loan amount and purchase price due to costs associated with some updating (items have a negative ROI).

I know that I can just move forward and spend 15-20 hours completing the assignment (it is a complex property/location), and I'll get paid, however I am never comfortable putting homeowners in the position of paying for something (appraisal) and getting nothing (except an appraisal of course). Please know, my client did not ask for a predetermined value, nor did anyone. Basically - I just want to withdraw from the assignment because I know too much, however need advise on how to do this tactfully / what to say, without making up a BS lie.
Be a professional about this, complete the assignment and no matter the result, move on.

You don't want to put the borrower in a spot? Kind of you, but your action puts your client in a tough spot, how is that any better?

How, you ask? Because the lender can't just tell the borrower that you have a bad feeling for how the value would've turned out and so here, take your money back. The lender has already spent time analyzing credit, preparing paperwork, and oh yeah, they are obligated to give the borrower a real answer based on something more than your hunch.

Lastly, you have already performed an appraisal (or so it would seem from the OP), so do what needs to be done and put it down on paper.

If you can't stand dishing out bad news, you're in the wrong line of work.
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  #6  
Old 09-16-2011, 09:14 PM
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Rocky Mountain High Rocky Mountain High is offline
 
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Thank you for your suggestions
  #7  
Old 09-16-2011, 09:24 PM
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HF Mudd HF Mudd is offline
 
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So you'd rather spend your time working for free? I'm assuming that you spent at least an hour or two performing research on the subject and the potential comparables to come to your preliminary conclusion.

If you want to withdraw from the assignment because the fee is insufficient for the time required to produce a credible appraisal, just ask your client for more $$$. You will either have the order cancelled or you'll be adequately compensated for your efforts.
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  #8  
Old 09-16-2011, 09:29 PM
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I understand your concerns. It bothers me, too. But if you withdraw, they will just get someone else to do the appraisal and they may decide not to continue using you. You've got avoid being an advocate for the buyer/lender. You are just hired to give your unbiased opinion. Even if the loan doesn't go through, that appraisal may help them in making other necessary financial decisions. No one likes to be told they have cancer...but I don't think not telling them is a better option.
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  #9  
Old 09-16-2011, 09:42 PM
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Not your problem. It also seems you've already performed an appraisal, be careful.
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  #10  
Old 09-16-2011, 09:45 PM
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Rocky Mountain High Rocky Mountain High is offline
 
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thank you residential guy. At the end of the day, I don't need this client for my peace of mind. I've never been too weak for "this business" as was suggested. I live for assignments that most appraisers run from, and plan to do so for the rest of my career. I don't mind doing purchases and refi's but my meat and potatoes has always been REOs and lately shortsales. I've just never come across one that was so far out of value. I don't care if another appraiser does it and hits the real number and the deal falls through. However, I am a bit disappointed that nobody actually suggested an out, except for the raise the fee part, that was cool.
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