My appraisal was sent out for review

[steph0515]

the day before my scheduled closing. I was supposed to get everything back today, but I haven't yet and the new closing date is Wednesday afternoon. I am VERY worried to say the least.

Can someone please explain why an appraisal is sent out for review? My specific situation, I am purchasing a condo (4story or less) using an FHA-loan. The property appraised approx 15% higher than the sales price. The condo building is not on the FHA approved condo list for my state, but another condo was sold in that building in the past month using FHA financing.

How long does something like this normally take? I was told its a 48-hour turn around for a desk review.

Thanks!

 

[JRS at OBX]

Sometimes appraisals are sent out for review because something doesn't look right. Sometimes they are sent out for review because the lender is trying to pressure mortgage brokers to use their special appraisal company. If your lender is Countrywide and the appraiser is not on the countrywide approved appraiser list, it will be reviewed by somebody that is on the list. That is Countrywides way of steering appraisal business to their list. (Their list is actually a separate company and it's a profit center for them. They charge you $500 and only pay the appraiser $200)

That being said, desk reviews usually don't take too long. A desk review is mostly just another appraiser looking at the original appraisal to determine if it meets all the rules.

 

[Ross (CO)]

....."The property appraised approx 15% higher than the sales price. The condo building is not on the FHA approved condo list for my state..."

- - - - -

Probably enough of a reason to have another look-see. Might betcha that many/most lenders these days are getting some sort of review report on many/most appraisals before their deal is closed. I won't even ask about.....what loan-to-value ratio is at play here.

 

[steph0515]

....."The property appraised approx 15% higher than the sales price. The condo building is not on the FHA approved condo list for my state..."

- - - - -

Probably enough of a reason to have another look-see. Might betcha that many/most lenders these days are getting some sort of review report on many/most appraisals before their deal is closed. I won't even ask about.....what loan-to-value ratio is at play here.

Its an 80% LTV. but I do see your point.

 

[Kevin A. Spellman]

If you are doing business with a mortgage broker and they do not fund the loan. The loan could be shopped to another investor. It is quite common for appraisals to be reviewed when a mortgage broker shops the deal.

You are experiencing a typical scenario for the valuation side of the lending practice. Review your closing costs. If I was a customer I would not pay for a second appraisal or for a review. They may hide the cost in underwriting fees.

Do you believe the property you are buying is 15% greater than the sales price?
The investor/lender will not.

 

[steph0515]

If you are doing business with a mortgage broker and they do not fund the loan. The loan could be shopped to another investor. It is quite common for appraisals to be reviewed when a mortgage broker shops the deal.

You are experiencing a typical scenario for the valuation side of the lending practice. Review your closing costs. If I was a customer I would not pay for a second appraisal or for a review. They may hide the cost in underwriting fees.

Do you believe the property you are buying is 15% greater than the sales price?
The investor/lender will not.

Well honestly yes, I do feel the property is worth the amount it appraised. It is in a highly desirable neighborhood, and the comps were all SOLD within 5k of the appraisal price (plus not minus). I am not sure how much more this review is going to cost, I just hope it isn't more than I paid for the original appraisal. I am working with a mortgage broker who is funding the loan.

 

[liberated]

Did you put 5% down?

 

[steph0515]

Did you put 5% down?

5% is in escrow right now. I am putting a total of 20% down for the property.

 

[ghrousseau]

the day before my scheduled closing. I was supposed to get everything back today, but I haven't yet and the new closing date is Wednesday afternoon. I am VERY worried to say the least.

Can someone please explain why an appraisal is sent out for review? My specific situation, I am purchasing a condo (4story or less) using an FHA-loan. The property appraised approx 15% higher than the sales price. The condo building is not on the FHA approved condo list for my state, but another condo was sold in that building in the past month using FHA financing.

How long does something like this normally take? I was told its a 48-hour turn around for a desk review.

Thanks!

For FHA loans where the condo project is not previously reviewed/approved by FHA, the lender is required to perform or submit for a "spot approval" with FHA. You lender/loan officer can explain this in more detail, but that may be related to the request for the appraisal review. The guidelines for condominium project spot review are very specific, and should have been completed by the lender prior to your loan going to closing. Without it, your loan can not be closed as FHA. Did you actually confirm your loan is still FHA with the loan officer? Perhaps they had to switch the loan to a different investor or loan product, and that may have triggered the review appraisal. Don't be afraid to ask questions and have them show you the approvals. They are required to provide that to you and you are entitled to see them as the borrower.

 

[Walter Kirk]

There are plenty of reasons for an appraisal to be reviewed as others have posted. Be sure that you are not charged for the review. You are concerned that your closing may be delayed and wonder why.
I can suggest one reason, the appraisal wasn't ordered on time. Many lenders fail to order an appraisal until all of the mortgage requirements are completed. They do this to save money but it creates problems for the appraiser who must now complete a rush assignment.
Any appraisal questions will create a delay in closing.