Appraisal after fire damage

[JSmith43]

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

A little bit of intellectual curiosity may keep you out of the headlines.

The owners have a reverse mortgage. They may have been competent at origination, but things could have gone down hill for them since that time.

You need to learn the intended use & identify intended users in order to comply with USPAP. They probably don't need an appraisal. But, who cares???

 

[J Grant]

Not about the owner, it is about the client If you want to ask why a client is ordering an appraisal, go for it.

However, if a lender client orders an appraisal and it is MV purpose I don't need to know "why" they are ordering it .

 

[JSmith43]

Not about the owner, it is about the client If you want to ask why a client is ordering an appraisal, go for it.

However, if a lender client orders an appraisal and it is MV purpose I don't need to know "why" they are ordering it .

Try reading the original post. Here is the first sentence:

"A homeowner called me who obtained a reverse mortgage in 2012."

No where does it say the lender ordered the appraisal. That is one big fat clue that it is not a lender appraisal assignment or it would have been ordered by a regulated lender, no?

 

[J Grant]

PEr OP the HO called because her lender/service r said she needed a new appraisal. Perhaps she is not allowed to order her own and they need to send their own appraiser? She should check with them.

 

[Richard Goodfellow]

Thanks for all the replies. I called the lender/servicing company but have not heard back yet. The servicing company did not order the appraisal. They told the homeowner they need an appraisal. At first they wanted plans from an architect but I guess are now ok with a drawing from the builder. They do have an estimate from a builder. The borrowers are not that old and are very competent. They just want to rebuild their garage. I am hoping when I talk to the lender I can convince them that an appraisal is not necessary. I hate to see these people waste money. They got sick of arguing and need to get started on building before winter. I am assuming if they do need an appraisal that it is subject to replacement of the garage. The check from the insurance company is in the owner and lenders name by the way.

 

[Don Clark]

Thanks for all the replies. I called the lender/servicing company but have not heard back yet. The servicing company did not order the appraisal. They told the homeowner they need an appraisal. At first they wanted plans from an architect but I guess are now ok with a drawing from the builder. They do have an estimate from a builder. The borrowers are not that old and are very competent. They just want to rebuild their garage. I am hoping when I talk to the lender I can convince them that an appraisal is not necessary. I hate to see these people waste money. They got sick of arguing and need to get started on building before winter. I am assuming if they do need an appraisal that it is subject to replacement of the garage. The check from the insurance company is in the owner and lenders name by the way.

About 2 years ago we had extensive water damage from burst pipes in a 2nd home we own in North carolina. It is a Townhouse style, old plastic type water lines. It did over $32,000 to our property and about the same to the one next door. We immediately hired a restoration company, paid the $1,000 deductible up front, and it still took over 3 months to get repaired. But, we did get a great 1st floor, new kitchen, and better plumbing. Once the work was done we received a check, and had to have it endorsed by the lender. Did not need a new appraisal(this was not a reverse mortgage). The lender hired a Local Realtor to come by, take photos, and sign off on the final. The lender then authorized a local branch manager to counter sign the check. The entire amount was owed to the restoration company. The lender was Wells Fargo. The entire process was not all that smooth but the check deal with Wells Fargo was.

 

[JSmith43]

Richard, who is servicing the loan?

Don's insurance repair was pretty complex, what with it being in a PUD ( I assume-"townhouse style" does not mean a PUD for sure) & other units being affected, yet WF didn't require an appraisal. There is also the issue of walls in coverage. Sounds like Don had deluxe coverage beyond the (assumed) association blanket policy. He's a wise old owl:laugh:

The lender wants to make sure the work is complete & the property properly restored. The customer should really talk to the LO & see what the big deal is.

Another thing they can do is call HUD & ask them if this is what they require for servicing RM loans. I doubt it, but there is always the chance that a service provider for RM may be more strict. But I don't see how running up the costs for a RM recipient by requiring an appraisal is protecting the property.

Make the lender that requires this put the request in writing "so that the owners can run it by HUD/FHA." That ought to make them check the servicing guide a bit more closely.

 

[Richard Goodfellow]

The servicing is by Celink out of Lansing MI. They have not called me back.

 

[Don Clark]

The servicing is by Celink out of Lansing MI. They have not called me back.

Suggestion. Have the property owners take the check to the lender they are making payments to and demand that it be counter signed.

 

[JSmith43]

Celink is the largest independent reverse mortgage lending servicer. They needed HUD approval to get the right to service RM. They didn't originate the loan. They just have servicing rights, via a contract. Basically, the lender subbed out servicing provisions to Celink. That way if something goes wrong, their name will not be the top headline

They may not talk to you due to privacy concerns, given the regulation of such matters. Anything linked to the borrower's account would by default, only be discussed with the borrower or someone with POA. So, don't ask them for anything specific to a particular borrower.

Servicing RM products has become predictably radioactive. BOA, WF, even MetLife, bailed from the business as it became apparent that no good could come of it when individual senior citizens would eventually default on taxes, upkeep, etc. Each instance was an instant headline generator that tarnished branding for the company as a whole.

So, it is no surprise that this "independent" loan service provider is getting lots of business & is overly cautious in documenting any move they make.

There is no obvious way for the appraiser to win, by taking on a middleman role. I suggest the borrowers bug the loan servicer directly, telling them that the appraisers they contacted wanted an appraisal order with a clearly defined purpose so that they could determine a suitable scope of work. If the loan servicing agent wants to be an intended user, they best put their requirements in writing.

I'd much prefer to dump this off on the homeowner, the originating LO or the borrower's HO insurance agent. They should be the A team for handling this BS