Reinstating an equity line of credit

[OllieGarchy]

Hello,

I searched the forums for this but couldn't find anything, so I'm hoping someone here can help.

A homeowner wants me to do an appraisal on his property. It's to re-instate his equity line of credit that was cut off by the lender when they did an AVM. To me, an equity line of credit, whether re-instated or new, is almost always a federally-related transaction. As such, shouldn't the lender be the one sending in the order?

I told the homeowner this and this is his reply:

"The appraisal is ordered in my name. I pay you and you issue the appraisal to me. I make a copy and send it to (the lender). We are not applying for a new loan or a refinance through (the lender). This appraisal is intended solely to dispute the valuation that was generated through the (the lender) software model. They look at it and use it to justify reinstating the loan. The “committee” reviews it, places it in a file for later on (see below) and then reinstates my line back up to 75% CLTV."

The homeowner states this is OK with the lender. What do you think?

And if I can do a "private" appraisal (not meant for mortgage purposes), yet it's going to end up with the lender, should I use the 1004?

Thanks for your help,
Tom

 

[robert higgins]

Hmm, would this be from Chase?

Just got a call from a co-worker of my brother asking the same thing, @900k 2yr fully remodeled house dumped to @750k via AVM and the lender dump his line of credit. There is no way this market in this (his) area dumped 20% over 12 months. He stated the same thing as you did above. Homeowner orders appraisal, submit to lender, lender make decision on homeower's private appraisal.

I too would like to hear from other people on here about how to handle it.

Bob

 

[Randolph Kinney]

As long as you have all that in writing from the home owner with his acknowledgment that you are going to perform the appraisal as a private party personal use appraisal and it cannot be used for a mortgage finance purpose, then go ahead. I would use the GPAR 1004 form so that there will be absolutely no confusion that this is not intended for lending purposes.

 

[Karl]

See this many times in PMI removal. Many lenders tell the homeowner to get their own Appraiser They want to remove any possible bias. I see NO problem with doing it as long as everyone understands whasts being done. & FEE is NOT based on rather bank AGREES or DISAGREES.

 

[TJSum]

See this many times in PMI removal. Many lenders tell the homeowner to get their own Appraiser They want to remove any possible bias. I see NO problem with doing it as long as everyone understands whasts being done. & FEE is NOT based on rather bank AGREES or DISAGREES.

Ditto that Karl. But when I do these type of assignments, the HO usually has a letter from the lender so that the proper SOW is in writing. I would hope for the same in Equity Loan situations as well.

 

[Karl]

I'm betting that even with an appraisal in hand NOT going to get the equity loan. I bet it will be a Credit Card with 6 months to year free then a 15 or more percent charge monthly. Equity lines are not giving back enough to the bank.

 

[Lloyd Bonafide]

Tom -

I had the exact same thing happen yesterday, except that the lender was WaMu. I told the owner to double-check that they could hire the appraiser, and I'm just waiting to hear back. They also said that they would reimburse the property owner "if the value came in high enough". They even gave the owner the target number needed.

 

[OSU Beavers]

My USBank HELOC was figured off of the tax assessors RMV on my property so do I just bring in another tax bill?

 

[ghrousseau]

Before accepting these types of assignments, I would ask the homeowner to get it in writing regarding the re-instatement of the LOC. If you read a LOC agreement, the lender has the right to restrict it for several reasons.


Just a thought. Lenders often say one thing and do another.

 

[jay trotta]

why are ya'll trying to be "Lenders" ??

HO calls wants an appraisal; the work is for the individual, write the report as such and move on. They can tell you anything they want - Does Not matter, your job ifn you accept it, is to provide a view of the "Market Value" - "As Is" and as of a specific date.
What the homeowner wants to do with that report is totally up to them - get your Fee and go to the next job.

Once your job is completed, who cares what they do with it; actually go get more of those jobs, drop your "E & O" and you just created a well paying end of the biz and got a raise on top of it all.

Good Luck