Blew a deal - LO is ticked

[LadybugLover]

Wow, I didn't mean to get everyone all worked up - I think the LO has cooled off - DH got a call from the borrower while I was out on an appraisal this morning - he was still pretty ticked, DH told him we couldn't discuss the appraisal with him, address his concerns to the broker and he said he was going to turn us into the BBB - oh gasp, I'm soooo frightened. My report is rock solid and I'm not worried about him turning me into the appraiser police and getting locked up and fined.

For those who are concerned though - I did tell the MB when he first contact us to do the appraisal that we could not guarantee him any value up front. He thought I had done the property for him a couple of years ago so that's why he contacted me to do it this time. I'd never seen the property before - there is another husband/wife team in our area and I think he had us mixed up with them. I didn't even look at his estimated value on the appraisal order until I was ready to hit the send button, and then I thought, Oh heck, he's not going to like me! It was a little late to call him then and say, oh, by the way, "Houston, we have a problem" We either black that out when we first get the order or don't pay any attention to it when it is on an order so we go into the whole appraisal process unbiased as to value.


Looking at the appraisal order, he doesn't "need" the value that was on the order to get the loan. I think I was only about $5000/$7000 short of what he would need to get into an 80% fixed rate loan. So, if he can't come up with the money to do that, he does have a problem. But, I guess since I had to hold his check for a week before cashing it, and it was only $450, maybe he does have a problem!

Oh well, on to other appraisals - In this market I'm sure we will have many more unhappy borrowers - but I can't save the world, so I'll just do the best I can and let it be what it is.

Thanks for all the input though, it's been an interesting read the last 24 hours!

Mary

 

[CANative]

I'm not concerned. I just like arguing with the duck.

 

[Webbed Feet]

I like arguing with you guys too! Not during duck hunting season tho......

 

[Rice Brewer]

There are times when it is just better to consult with a prospective client and discuss a problem assignment. What's wrong with telling them that someone is stoned if they think market value is anywhere near their estimate? Sometimes it's just better to be a little naughty than it is to work all day on some report you know will end in grief for everyone and will make you look greedy and unethical?

That is a very slippery slope. Where does it end? Today it is a~20% variance from their estimated value, tomorrow it is ~15%, the next day - and so forth. Once one starts down that path, they have you by the ***** and can pretty much demand anything they want of you.

 

[rescom]

I just completed an appraisal for a Mortgage Broker - fortunately it was COD and I've cashed the check - borrower is mad because I came in $100,000 short of what he "needed" to get out of his ARM. Subject is located in a newer subdivision which sold out right at the top of the market here. Since that time, everything has pretty much tanked - the model homes are now listed for sale - they all have $85,000+ in upgrades and are still selling for about what I appraised the subject property for. I unfortunately made an error in the sketch, which I have corrected - I was about 90sf off which isn't huge in this price range - but of course that's given him fuel for his fire that I'm totally incompetent! He's also arguing that the parcel size is bigger than I say it is - I'm using the Assessor's Parcel Map - clearly states 80 X 130, so not sure how I can be off on that - I told him I am not a land surveyor and if the borrower wishes to have it surveyed and has credible proof that it is bigger, I would be happy to revisit the report. Bottom line is, now he's saying if I don't change it to be satisfactory to him he will call the BBB, (gasp, I'm scared) and he will submit my report to the State Board - well, I feel my report is good, so I'm not going to lose any sleep over that either - but the bottom line is he's asking me to refund his borrower's money and if I do that, he'll just get another appraisal and be happy. Not going to happen so we'll see what he really does.

The appraisal report had the owner's estimate of value - which I told the LO at the time, we do not make any guarantees of value, we do not consider anything on the appraisal request to influence value conclusions, etc. etc. etc. I should have made him send me a new request with no estimat of value, I know that, but I didn't.

Anyhow, any suggestions - I've emailed him back telling him basically that I did my job, if the borrower wants another opinion, go for it, but I'm not refunding his appraisal fee. Which, by the way, I waited for a week to cash because the borrower didn't even have the $450 to pay for the appraisal. OF course, I didn't do any work at all on the appraisal until I could cash the check.

Seems that it's the desparate borrowers that are about to lose everything that get the snippiest! He's in an ARM that is adjusting and he wants out - well, that's not my problem -

Anyhow, I suppose I'll get flamed for even taking a job from a MB, but I did, and now I'll just see how it plays out.

Mary

Ask the LO how he plans on guaranteeing values in about 7 months from now.

 

[Rice Brewer]

"Dude! $600,000!? What have you guys been smoking. Nothing's ever sold in this neighborhood or any other neighborhood in the county for more than $400,000 or so. Do you still want me to do an appraisal?"

Respectfully, that conversation results in an appraisal.

What of you are wrong by 20%, the loan is denied but would have been approved had you done your due diligence? Do you have a Standard 1 compliant work file with a signed certification when the State comes calling?

 

[CANative]

That is a very slippery slope. Where does it end?

Like I'm going to get addicted to sleazy comp checks for slimey brokers.

Respectfully, that conversation results in an appraisal.

CALIFORNIA BUSINESS AND PROFESSIONS CODE
DIVISION 4, PART 3,
SECTIONS 11300 et seq.

11302. Definitions
For the purpose of applying this part, the following terms, unless otherwise expressly
indicated, shall mean and have the following definitions:

(a) "Agency" means the Business, Transportation and Housing Agency.

(b) "Appraisal" means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.

when the State comes calling

LOL.

 

[WadeKoutnik]

Mortgage brokers catch hell from angry borrowers who have been told they can't get a loan. I don't think borrowers fully realize that the appraiser and broker are completely independent from each other... all they know is that they desparately needed or wanted a loan, they have paid out enough money for a couple of weeks worth of groceries and now... nothing.

Brokers don't explain enough about this dynamic because they fear they won't get a shot at the deal; not all appraisers are competent; after all it's just an opinion; appraiser's don't help matters by their lack of business communication skills; the entire process is a big mystery to borrowers, brokers and many appraisers.

When there is a HUGE discrepancy in what the broker and borrower had in mind and what the appraiser delivers there is a strong feeling of being ripped off. Right or wrong, that's how they feel. I don't think anyone is served when an appraiser leaves a client to dangle in the wind and deal with the aftermath on their own.

I think that is definitely true. I get an order from some company up in Ohio or something and the borrower talks to me as if I work for the lender.

 

[Rice Brewer]

CALIFORNIA BUSINESS AND PROFESSIONS CODE
DIVISION 4, PART 3,
SECTIONS 11300 et seq.

11302. Definitions
For the purpose of applying this part, the following terms, unless otherwise expressly
indicated, shall mean and have the following definitions:

(a) "Agency" means the Business, Transportation and Housing Agency.

(b) "Appraisal" means a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion in a federally related transaction as to the market value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.

For the purpose of the Uniform Standards of Professional Appraisal Practice (USPAP), the following definitions apply (note: It says nothing about it being a written statement. In fact, oral expressions of a numerical values are appraisals when communicated by persons subject to USPAP):


APPRAISAL: (noun) the act or process of developing an opinion of value; an opinion of value. (adjective) of or pertaining to appraising and related functions such as appraisal practice or appraisal services.
Comment: An appraisal must be numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than, not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).

 

[CANative]

I suppose TAF could throw a tattered copy of USPAP at me if I they disagreed with my statements on this thread. But the only authority I'm answerable to is OREA.