Automatic Review??

[Blue1]

What the heck is an "automatic review?" Had a client tell me that because the borrower is at a certain LTV and interest rate, that the investor (BIG Company who's name starts with a "C") is doing an "automatic review" on my report. Apparently this review has nothing to do with any "red flags" in my report but has to do with the borrower and type of loan. Well guess what? The reviewer "slashed" the value in my report and now the "Big Bucks" investor wants to raise the interest rate!!! And no......I'm not allowed to know who the reviewer is and I can't get a copy of the review. Am I wrong or does something SMELL here?

 

[Judy Whitehead (Florida)]

Hey I know exactly who you mean....I had a mortgage broker call me and ask if I was "Approved" by C.... M...... and that one of her appraisers told her that his appraisals were automatically reviewed, which, of course cost extra bucks and time. She wanted someone who would not cost her extra bucks and time.

I told the MB that I had done many appraisals for this company both conv. and FHA and never had a problem. and to my knowledge my appraisals were not subject to automatic review.

Then....low and behold I was told by another MB that every high risk loan has a field review of the appraisal and that the borrower paid for it. It had nothing to do with the appraiser's work...just the borrower's credit. The review of the appraisal was strictly based on the borrower, not the appraisal. Actually, in concept it is not a bad idea!!!! Keeps the poor borrowers from over extending themselves.

 

[Blue1]

Judy,

I see what you mean but it's also a way to falsely raise the borrower's interest rate with a bad review. Effectively weeding out undesirable borrowers by laying false blame on the appraiser.....still seems like it SMELLS.

P.S. I forgot to mention that I was told that the reviewer wants to remain anonymous so there's no "conflict." Let's see now.....an anonoymous reviewer that works for the big "C" shooting down perfectly good appraisals to raise a borrower's interest rate. What a racket!!!

 

[BarbaraNJ]

Blue1..........

Judy is correct; has nothing to do with your quality of work. I can understand your angst, however in the inference that it was YOUR work which was causing the borrower extra $$$ when all along it is the lender.

Something tells me that you are still not used to getting ALL the blame. Isn't that taught in "Appraiser 101"??

All kidding aside, there are lending rules and policies that we, as appraisers, are not aware of and I'm not so sure we want to be. After all, we are supposed to be objective in our opinion.

I just did a job for a bank---regular client----report for a refinance. The homeowner purchased the home for $233,000 exactly 2 years ago. Claimed did $70,000 of improvements. Of course, not all improvements translate into value. I appraised home for $300,000. Owner wants $235,000 refi, so I figure at 80%LTV I'm "safe". Get a call from lender that owner does not qualify because they are not just refi-ing the Existing Mortgage, but taking Cash Out also, so there are different "rules", causing the owner not to qualify. Of course, appraisal is blamed when in Reality, it is the bank rules that are making the difference.

I am certain that whenever lenders-- particularly mortgage companies who, unlike banks-- live and die by the mortgages they issue, can jack up rates or add points or raise fees or anything else to legally make money , they will.

I know that its' tough not to take it personally, but if it helps hearing it, its not YOU, and this is nothing New.

__________________________

The Harder I Work, The Luckier I Get

 

[Blue1]

Barbara,

I KNOW it's the lender! That's what frosts me! And what really frosts my "Kadicky" is that they are falsely cutting the value in my report in order to raise the interest rate on the poor borrower!!! With the help of another appraiser to boot!!!

O.K. you're right, guess I should calm down......O.K. I'm calm now......but........IF I find out who that #@&*$%@ reviewer is why I'll.........Sorry got a little carried away there

 

[David Mullen]

This might be a good thing for the news media to investigate or even the government since they are supposedly looking into lender fraud.

 

[wyecoyote]

The automatic review is an AVM my Mom works as an underwriter and they "review" every appraisal with an AVM if the AVM and appraisal value is more than 5% they go with whatever is lower and if it is more than 10% they go with a field review.

 

[Joe Birrell (NY)]

Chase does "automatic reviews" if appraiser in not on their so-called "aproved list" (loan being submitted via mortgage broker).

As to the rest of the scenario...hmmm....who knows, anything is possible in this business.

 

[Ted Martin]

To some extent this is job justification. C.......... M........... has a management company L............ . If the appraisal was not done through L............ then they automatically review the report. Thereby making it more expensive in terms of time and money for one of their LO's to go outside the L............ system.

 

[Anonymous]

Blue1,

I have seen many of these. And done many reviews for this situation. Most are fine. Some get ripped.

I do think however that the appraiser is allowed to respond to any negative remarks or issues made by the reviewer. If I was the homeowner, I believe I would have the opportunity to see both the appraisal and the review since both were being used by the lender to set my LTV.

If it were me, I would strongly request an opportunity to respond to the review. I owuld also strongly request to know if the review was a review or an AVM.