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Missed the value...please amend appraisal to reflect $$$$

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Paulette in Texas

Thread Starter
Sophomore Member
Joined
Jan 24, 2002
Dear Forum: Had to peel me off the ceiling earlier today. Received WRITTEN fax from MAJOR National Lender we have done huge volume for through recently deceased LandAm folks. Here's the background: Small VERY rural city of 3200+- waaaaay south but they are part of our MLS. He built "good" quality house about 8 years earlier for $175k and now wants to have PMI removed. No problem...shame on us. Very nice on 2.5+- acres and maintained. But guess what? Sales similar within the last 12 months AND current listings all reflect value in the $175-$180 range. Do you think he maybe overpaid????or that it is a VERY limited market market with VERY limited sales. And NO sales supporting his value. We did the inspection. Shame on us we left alum windows in page 1 of URAR instead of Storm and missed one distance (rural) by 1.5+- miles: Rural, route & box stuff. I was so Mad, I just left a blistering message for this actually pretty nice Major lender...on the East Coast telling them that "We would not be replying in writing to their request, nor by email, nor would we be revising our report." However, IF they wished to discuss it with us, they could call us by phone and we would. I believe I mentioned, "if" they could overcome MY attitude, we'd be happy to discuss the report with someone HIGHER up the food chain.

Would you believe I received "2" phone calls from young ladies with this firm within 20-45 minutes. The second was a major underwriter. The fax and the first was from several very nice young (my opinion) young women following directions from some yahoo who wanted his pmi off. In person, I am frequently nicer to people. I explained FIRST they were violating our new (# I believe) HB 1068 bill which says 'THEY MAY NOT CALL US AND THREATEN US NOR DEMAND THAT WE CHANGE OUR OPINON OF VALUE.' But we would discuss it with them...by the way, they sent us a copy of the previous report to support the "change" in opinon. All the comps they submitted were 8 years old. Geeeezzzz. Do you get the feeling he wants his pmi off but he found out he could not support the value IN THE market? But let's make sure that the 1.5+- mile difference for this rural comp and his storm windows 8 years old will suddenly change the value $25,000. Oh #$^$#@ you want us to use those 8 year old comps & just PRODUCE a better value? No problem. You just called the wrong company. The number hitter is ...no that one was put on suspension by FHA but Whoops, he's been re-instated, so maybe you can get it. But you won't get it from us. Sorry, for venting. But if 3 local realtors that we called on cannot come up with better comps, nor listings, then that's the value. Why send us the copy of the original report? Call the same one back and let him produce that value. The shame of it? Same house in really good Ft. Bend/Montgomer/Harris County subdivision would still not get him there. And YES it was OVER appraised originally. But this time the lender actually HAS an accurate value. What do you want to bet, they needed to NOT have escrow? or equity was created? After all, they showed up and put the deal together... Does it never end? Paulette in Houston, Tx...Rotts rule and Shih tzus fine too...go w...
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
I've been thinking that the attitude that HOs and LOs and Realtors have regarding Appraisers being there just to hit whatever number they want is because of the large amount of Appraisers that have been doing just that for too long. There are too many out there that truly think that's what we are for and cannot believe it when they encounter an honest Appraiser.
 

Randy Beigh

Senior Member
Joined
Jan 16, 2002
Paulette

This gets into my pet peeve.

The appraisal is an opinion/estimate. Why and how did this opinion become an up or down issue with lending? The lender should have the ability to take the appraisal and use it as part of the business making process, not as an absolute. There is probably nothing else in the lending process that is this aboslute. If the value comes in lower than anticipated, but everything else is good, why would anyone want to kill the loan? For typical loans, the rate could be raised, points could be raised, or length of loan could be reduced. I'll bet there is another 1/2 dozen ways for the lender to be protected and still make the loan. It's absurd to put that much weight on another person's opinion.

In your situation, the market, apparently, changed downward from the original purchase date. Your opinion notifies the lender of that change and if they choose to continue with the PMI removal, it would behoove them to make other changes to reduce their risk.

There must be something dealing the federally related transaction issues that have put the lenders in this position. If I was a lender, my job would be to make loans and putting this much weight on an opinion of value, makes the job harder.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
Paulette,
Your gonna be blamed anyway when the Real Estate Market takes the same road as Enron, World Com, & the others anyway cause U say go W. (humor)
So U might as well tell the Attoney General, Bankin Commisioner, Governor, Senate, Congress, reporters & Appraisal Board what PRESSURE these people laid on U & maybe mention that Accountants increased company's Value's & Mortgage Co's want Appraiser's to iincrease Employe's Worth.
 
Joined
Jan 16, 2002
Paulette:

They do have a propensity to make your blood pressure sky rocket.
Take three aspirins, a couple of deep breaths, a stiff drink of Jack, and enjoy the holiday !
 

Travis McGee

Senior Member
Joined
Sep 18, 2004
If we appraisers started charging for telephone minutes the way that lawyers due, a lot of junk follow up calls would be elimnated. Each appraisal is one assignment. After that, any discusion/questions not from an underwriter we should charge for by the minute. Why are we constanly givng away our time/expertise for free?And then we complain how many hours we have to work!! No wonder!

I had two request recently for "reconsideration of value" from two manangement companies- both because buyers were unhappy due to "low value" Boo hoo!! I faxed back to one that what theywere actually requesting was for me to reach a predtermined value, and that I would keep thier request on file as documentation of lender pressure. (refused to respond to their comps etc) Why do we waste time accomocating these people when they are clearly in the wrong with approaching us with these requests? The appraisal was done. If they want a second look , it is like requesting a second appraisal and they should make a fromal reqest for that and pay us.

Working on reply to second one now.
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Randy,

You have an excellent point. I have seen some of my clients re-negotiate the loan with the borrower subsequent to receiving my report. I think these are the more honest lenders. I'll usually consider them as my best clients.

The lender looks at the borrower's credit, income, etc. when they first consider doing a loan. From this information a determination is often made as to what they need as a value for the home which will become the basis for collateral on the loan.

To me, this seems upside down. Shouldn't an appraisal be ordered FIRST? O.K. I'm just naieve........
 
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