Appraisal after fire damage

[Richard Goodfellow]

A homeowner called me who obtained a reverse mortgage in 2012. Her garage recently burned down and she received a check from the insurance company to rebuild. The check has to be endorsed by the lender. The lender or servicing says she has to submit plans and a new appraisal before they will release any money. My question is why would you need a new appraisal for a loan they already have? I can understand that they want the property rebuilt the way it was but what is the purpose of the appraisal? What if the value is lower now? I did not do the original appraisal. Anyone have any experience with this?
Thanks

 

[RSW]

Not a clue!..........

 

[nstanbru]

Is the check made out to the home owner and the lender, or just the lender? It seems to me that some one needs to let the lender know no one is asking for more money. They already have the money (in the form of a check), they just need the check endorsed.

 

[BRCJR]

Lender cannot cash check without homeower signing. Homeowner cannot do either.

Lender holds money and handles like construction, letting so much at a time as repairs are completed.

Should be simple.

 

[JTip]

The lender or servicing says she has to submit plans and a new appraisal before they will release any money.

The lender or servicing is using the term appraisal loosely.

They need an estimate from the builder. Once complete, they issue the check made out to the insured and lien holder(s) to be endorsed. I'm not sure why the claims adjuster is not acting as a liaison between the insured and builder.

Perhaps reverse mortgages have guidelines about these unique situations and do require an appraisal. Good question for the kids over on the BO.

Unlike appraisers, the builder will be paid pretty much immediately after completion of the job. Must be nice.

 

[ctapraser]

The lady needs a new insurance agent!!
The lender should not even be in the picture. I had to get a new roof and siding due to Hurricane Sandy, the lender had nothing to do with it.

 

[ctapraser]

A homeowner called me who obtained a reverse mortgage in 2012. Her garage recently burned down and she received a check from the insurance company to rebuild. The check has to be endorsed by the lender. The lender or servicing says she has to submit plans and a new appraisal before they will release any money. My question is why would you need a new appraisal for a loan they already have? I can understand that they want the property rebuilt the way it was but what is the purpose of the appraisal? What if the value is lower now? I did not do the original appraisal. Anyone have any experience with this?
Thanks

oops, just saw the reverse mortgage part, disregard last post

 

[Mike Garrett RAA]

I got a new roof this year and the check was made out to both me and the lender. Sent it to the lender who endorsed it and sent it back. I then paid the roofer.

 

[JSmith43]

JTip is almost assuredly right. The lender needs an "appraisal" of how much the work will cost (a bid, in this case).

The first thing the owner should do is have a coherent conversation with their insurance agent. The agent may offer to contact the lender for his/her senior citizen customer, if they need help explaining the situation.

They could also call their original loan officer & ask for this type of assistance (calling the lender & getting clarification).

They will probably end up sending the loan servicer the bid & specifications for the work to be done by the contractor you choose. Make sure the winning bidder is aware that this is a requirement.

When I worked for a large lender, every now & then a contractor would come into our branch office with an insurance check signed by the owner. They were looking for the person or person's with authority to sign the check. Boy could they get only if both the branch & regional managers were out to lunch or on appointments!

 

[J Grant]

Who cares why they need it? Or if value is different than original appraisal.

If they ordered an as is appraisal with impact on value of damaged garage, either you feel competent enough to do it or turn down assignment. The check is a great cost to cure estimate so that part is made easy.