Am I overthinking this?

[KHS445]

I believe everyone if overthinking this, beginning with the lender. First the lender has the before value based on the original appraisal and acreage. Now all that is needed is the post-split value of the property currently encumbered by the original mortgage. Ask the lender for a copy of the proposed survey or professionally prepared legal description for that part of the originally mortgaged property that will be remaining as collateral for the existing mortgage. Once you have that information you can provide them with a report which estimates the current value of the remaining property (of the original 9.6 acres) and any related improvements. Once the lender is confident that their collateral position supports the remaining loan balance they can issue a partial release. Now if the original mortgage was sold into the secondary market things may be a bit more complicated to obtain the partial release.

The value and ownership status of the additional one acre has no impact on this assignment. First off, the lender does not have a lien on the additional acre, so whether it is part of proposed split or will remain under current ownership is not any of the lender's business. Second, if the additional acre is a part of the proposed split, the lender has no interest in that portion of the property and thus again it is none of their business.

 

[sputnam]

I believe everyone if overthinking this, beginning with the lender. First the lender has the before value based on the original appraisal and acreage. Now all that is needed is the post-split value of the property currently encumbered by the original mortgage. Ask the lender for a copy of the proposed survey or professionally prepared legal description for that part of the originally mortgaged property that will be remaining as collateral for the existing mortgage. Once you have that information you can provide them with a report which estimates the current value of the remaining property (of the original 9.6 acres) and any related improvements. Once the lender is confident that their collateral position supports the remaining loan balance they can issue a partial release. Now if the original mortgage was sold into the secondary market things may be a bit more complicated to obtain the partial release.

The value and ownership status of the additional one acre has no impact on this assignment. First off, the lender does not have a lien on the additional acre, so whether it is part of proposed split or will remain under current ownership is not any of the lender's business. Second, if the additional acre is a part of the proposed split, the lender has no interest in that portion of the property and thus again it is none of their business.

Agree. Lenders have their own procedures and requirements which sometimes impact that the appraiser is asked to do and which don't always make sense.. from an appraiser's perspective. I don't spend much time wondering why a lender wants it the way they want it. If a request seems nuts, I will advise the client. If they still insist.. and it doesn't require a violation... then that's what you do... and make sure your bill reflects the work.

 

[Elliott]

'AfterValue1 + AfterValue2 > BeforeValue' is what the lender is looking for so their 'security' in the original loan is preserved.