Advice needed...

[Ramona]

As so many homeowners are refinancing on a regular basis, lately I have gotten several orders where the previous refi was around a year ago. The owner produces this previous appraisal, with "comparables" that I cannot agree with, due either to location in a seemingly superior community (sometimes crossing county lines), large discrepancies in age, configuration or condition, incorrect measurements, no mention of deferred maintenance, etc. I complete the assignment using what I feel are the most comparable sales available, and a week later, the lender sends over the previous appraisal and wants "an addendum" commenting on the discrepancies in valuation. Of course, as I come in lower, it seems that everyone involved assumes that I am "the bad guy", and in error.

Exactly how far are we expected to comment in this situation without a review being ordered? My feelings are that I should be responsible for supporting my own value, but not for disproving another appraiser's value, and thereby assuming some responsibility for it, without actually doing (and being paid for) a review. Am I incorrect in feeling that the underwriter involved should have some measure of responsibility in deciding which appraiser best supported the value when a discrepancy is present, or at least choosing an independant appraiser and ordering reviews of both? Is this a common practice and I am simply over dramatizing my potential responsibility for trashing another appraisal? Advice from the board gurus is appreciated.

 

[Pamela Crowley (Florida)]

Ramona,

They are abusing you!!! DO NOT let them do this to you.

If they want a review, they can order and pay for it. I don't think I would accept that review order either. DO NOT comment on the other appraisal at all. What I would do (and have done) is tell them to have mine reviewed and I have even offered to have mine sent to the state board for review. Ask them to please send the other one to the state while they're at it. This backs them down pretty quick.

Just tell them that you stand by your work and will not comment on the other one. Even though they are likely doing this out of ignorance and wanting a pushed value just to close another bogus loan, they are acting highly unethically and you cannot legally respond to this without doing a review.

Just say 'NO!". Don't let them make you feel bad. It's their problem (and maybe some other appraisers).

 

[Elliott]

Ramona,
Advertising works. Homeowners see ads on TV,
they call 800 numbers and get loan officiers who
promise them the moon and the sky and no PMI....
so you've just been in the house a year, no problem,
that 5% equity has instantly turned into 20% or more.

My latest calculations for re-sales of the same homes
indicate a 3%/year rate of inflation for the last 3 to 5 years.

Don't ever get in the trap of 'explaining' someone
elses work. If they want a forensic appraisal done
on the 'last' appraisal, have them hire one of those
Matlock appraisers who specialize in it.

elliott

 

[Ray Ohler]

Word for word. It isn't YOUR problem, its theirs. Choice of comparables IS an "opinion" item, that's why a lot of prosecutors won't touch a fraud case involving a "bad appraisal" unless there are a lot of other factual errors in the report which tend to make it VERY clear that the appraiser went out of his/her/their way to trump-up the value opinion. I see you are from Baltimore, well, you should be very familiar with "ballooned appraisals". One scheme they have going here is to sell the property with no money down, go back and re-appraise one year and one day later, get the down payment money AND go back and re-appraise it again after another "year and a day" when the borrower has financial problems, that is unless the property was already foreclosed on.

 

[David S. Roberson]

Pam's right. I get this kind of crap occasionally too, and I just tell them I can't comment on an appraisal I haven't reviewed.

 

[Ramona]

Thanks so much, guys and doll!

This had been bothering me all weekend, as I just couldn't get my mind around the idea that accepting and performing an assignment meant being responsible for refuting any previous appraisals that are dredged up out of the woodwork.

 

[airphoto]

Ramona,

When I was 'young' in the bidnez I used to accept the burden of guilt, as you have .. 'course was working for TRW at the time, and they had deep pockets and didn't mind chasing their tails on these requests (or paying me.)

Now that I'm somewhat 'mature' (read: grouchy, miserable and self-employed) my first question back to the LO on such a matter is "wonder what's wrong with that prior appraisal."

All good advice above, particularly Pam's .. don't let these clowns suck you in! When they want you to write an addendum, just answer back: "Read my appraisal!" It's a report! If they're not competent to read it or to comprehend it, it's not your problem ..

 

[Richard Carlsen]

What they are asking you to do is called a Review Appraisal. So do it. Tell them what your fee is for a Review Appraisal and tell them to fax an order. However, I would not even get into comparing two appraisals even in a Review Appraisal. If they want this kind of research, they should hire a third party of do a review of both appraisals.

An addendum relating your appraisal to another appraisal is not an appropriate request because it is requiring you to justify your numbers against another appraisal and to make conclusions about the appropriateness of the other appraisal.

Don't agree to this kind of request.

 

[Dale Smalley]

If they already have an appraisal why do they need a new one. ????
I agree with the posters that they need to order a review or you can say that you did not consider the old appraisal and did your own research of the market and developed your own opinion based on the current market conditions.