Appraisal Amount Changed

[shric]

My wife and I applied for a refi with Quicken Loans about a year ago. We live in East Central Florida.

We had to get an appraisal that was setiup by Quicken (we didn't pick the appraiser).

When Quicken called with the results, they said the value was $128,500 which was devastating because we owed $205,000. So, we got no loan. We never got a copy of the appraisal and weren't too concerned because it was so bad.

We are again looking at a possible refi and as a result called Quicken to get a copy of the appraisal. Imagine my shock when I looked at it and it showed a Sales Comparison Value of $195,000 which would have made a refi possible. The Cost Approach is $313,000.

I called our contact at Quicken and he said the appraisal was $128,5000. (Sales Comparison). Can a lender make an appraiser change their valuation if they don't like some of the comps? Is that legal? Ethical?

 

[Lobo Fan]

I am trying to understand your statement. Your appraisal shows, $195,000 in the sales comparison approach section, and $313,000 in the cost appraoach, and yet the appraised value is $128,000? Somewhere in the report there should be a reconciliation statement where the appraiser correlated all of these different numbers.

It may be possible that Quicken or their AMC changed your report after the appraiser submitted the report. You may want to contact the appraiser and ask him/her about the final value on the report.

This kind of monkey business was almost common a few years ago, especially in Florida. Something is very strange.

 

[Debra Sampson]

It sounds like a situation where either a review appraisal was ordered and that was the final value accepted by the bank or the underwriter wrote down the value of the appraisal to what they were willing to risk. Unfortunately there are more people/numbers involved in the mortgage process than just your appraiser these days.

Hopefully things are looking different now in your area and your new lender will be able to help you refi.

 

[Mike Plumlee]

I called our contact at Quicken and he said the appraisal was $128,5000.

When your loan officer stated this - and you were looking directly at the appraisal, what did you say to him then? Did you tell him you were staring at the appraisal and it indicated $195,000 as the value? What did he say then?

Please fill in some of the conversation here because this doesn't make any sense.

 

[Tony V]

I am trying to understand your statement. Your appraisal shows, $195,000 in the sales comparison approach section, and $313,000 in the cost appraoach, and yet the appraised value is $128,000? Somewhere in the report there should be a reconciliation statement where the appraiser correlated all of these different numbers.

It may be possible that Quicken or their AMC changed your report after the appraiser submitted the report. You may want to contact the appraiser and ask him/her about the final value on the report.

This kind of monkey business was almost common a few years ago, especially in Florida. Something is very strange.

While I understand the reasoning for you saying this LOBO but the appraiser can't discuss this with the borrower as they are not the client..

 

[shric]

I am trying to understand your statement. Your appraisal shows, $195,000 in the sales comparison approach section, and $313,000 in the cost appraoach, and yet the appraised value is $128,000? Somewhere in the report there should be a reconciliation statement where the appraiser correlated all of these different numbers.

It may be possible that Quicken or their AMC changed your report after the appraiser submitted the report. You may want to contact the appraiser and ask him/her about the final value on the report.

This kind of monkey business was almost common a few years ago, especially in Florida. Something is very strange.

Sorry, I called "Client Relations" and they sent me the appraisal they had on file. That was the $195,000 value. When I called the salesperson we had worked with he said the appraisal said $128,500. When I spoke to him, I was at work and didn't have the $195,000 paperwork in front of me.

FYI, several calls to him for his copy of the $128,500 appraisal have not been returned. Can the lender throw out some favorable comps if they want? Does the Appraiser have no say in this?

 

[Peter LeQuire]

Sorry, I called "Client Relations" and they sent me the appraisal they had on file. That was the $195,000 value. When I called the salesperson we had worked with he said the appraisal said $128,500. When I spoke to him, I was at work and didn't have the $195,000 paperwork in front of me.

FYI, several calls to him for his copy of the $128,500 appraisal have not been returned. Can the lender throw out some favorable comps if they want? Does the Appraiser have no say in this?

Lenders can evaluate appraisals, both by their underwriting and/or compliance reviews, and by having a review appraisal done. Either way, your lender could have made a judgement that the $195,000 value was not adequately supported. How the lender got a $128,500 value could have been from a review appraisal or from an underwriter's opinion about what value was supported.

You probably can only find out what went on by getting a copy of the appraisal: they are required to provide you one.

 

[Mike Kennedy]

Sorry, I called "Client Relations" and they sent me the appraisal they had on file. That was the $195,000 value. When I called the salesperson we had worked with he said the appraisal said $128,500. When I spoke to him, I was at work and didn't have the $195,000 paperwork in front of me.

FYI, several calls to him for his copy of the $128,500 appraisal have not been returned. Can the lender throw out some favorable comps if they want? Does the Appraiser have no say in this?

Dodd-Frank Financial Reform Act of 2010

SEC. 1472. APPRAISAL INDEPENDENCE REQUIREMENTS. (a) IN GENERAL.—Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is amended by inserting after section 129D (as added by section 1461(a)) the following new section:
‘‘§ 129E. Appraisal independence requirements
‘‘(a) IN GENERAL.—It shall be unlawful, in extending credit
or in providing any services for a consumer credit transaction
secured by the principal dwelling of the consumer, to engage in
any act or practice that violates appraisal independence as described
in or pursuant to regulations prescribed under this section.
‘‘(b) APPRAISAL INDEPENDENCE.—For purposes of subsection (a),
acts or practices that violate appraisal independence shall include—
‘‘(1) any appraisal of a property offered as security for
repayment of the consumer credit transaction that is conducted
in connection with such transaction in which a person with
an interest in the underlying transaction compensates, coerces,
extorts, colludes, instructs, induces, bribes, or intimidates a
person, appraisal management company, firm, or other entity
conducting or involved in an appraisal, or attempts, to compensate,
coerce, extort, collude, instruct, induce, bribe, or intimidate
such a person, for the purpose of causing the appraised
value assigned, under the appraisal, to the property to be
based on any factor other than the independent judgment of
the appraiser;
‘‘(2) mischaracterizing, or suborning any
mischaracterization of, the appraised value of the property
securing the extension of the credit;
‘‘(3) seeking to influence an appraiser or otherwise to
encourage a targeted value in order to facilitate the making
or pricing of the transaction; and
H. R. 4173—813
‘‘(4) withholding or threatening to withhold timely payment
for an appraisal report or for appraisal services rendered when
the appraisal report or services are provided for in accordance
with the contract between the parties.
‘‘(c) EXCEPTIONS.—The requirements of subsection (b) shall not
be construed as prohibiting a mortgage lender, mortgage broker,
mortgage banker, real estate broker, appraisal management company,
employee of an appraisal management company, consumer,
or any other person with an interest in a real estate transaction
from asking an appraiser to undertake 1 or more of the following:
‘‘(1) Consider additional, appropriate property information,
including the consideration of additional comparable properties
to make or support an appraisal.
‘‘(2) Provide further detail, substantiation, or explanation
for the appraiser’s value conclusion.
‘‘(3) Correct errors in the appraisal report.

 

[Lee Lansford]

...a Sales Comparison Value of $195,000 which would have made a refi possible. The Cost Approach is $313,000.

...

Perhaps there were problems with the appraisal other than what is obvious in the above numbers.

 

[444nutman]

My wife and I applied for a refi with Quicken Loans about a year ago. We live in East Central Florida.

We had to get an appraisal that was setiup by Quicken (we didn't pick the appraiser).

When Quicken called with the results, they said the value was $128,500 which was devastating because we owed $205,000. So, we got no loan. We never got a copy of the appraisal and weren't too concerned because it was so bad.

We are again looking at a possible refi and as a result called Quicken to get a copy of the appraisal. Imagine my shock when I looked at it and it showed a Sales Comparison Value of $195,000 which would have made a refi possible. The Cost Approach is $313,000.

I called our contact at Quicken and he said the appraisal was $128,5000. (Sales Comparison). Can a lender make an appraiser change their valuation if they don't like some of the comps? Is that legal? Ethical?

I work your area.
The first thing the cost approach was not done properly. It should have been adjusted for economic depreciation, which is currently the cost to build is more than the market will bear. Probaly in 2006 the market value would supported the cost to build of $313,000 but todays market does not. If you drive around town you will see little to no new construction, which is due to builders are losing money building new homes. So the cost approach was not adjusted for the economic obsolescence.
The question I have does the appraisal have $195,000 on the very bottom (right hand side) of the sales grid? (2nd page if a house, 3rd page if a condo, typically)
If that number is $195,000 then that is the value for your home on the appraisal. If that is the case then Quicken reduced the value.
FYI
The lender is required to give you a copy of the appraisal, don't let them tell you otherwise.