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Shady.buyers down payment program?

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Sean Sutton

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Member
Joined
Jun 19, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
Wow....OK...this might take a minute to explain, however bear with me and hopefully I can get some feedback and have an educated response for the parties involved....

I am appraising a high end property listed by a local realtor with a less than stellar reputation. The selling agent is the mother of the listing agent, both work in the same office, both are known by me to be trouble. The subject property has been in foreclosure several times....eight months ago the subject property was purchased by some unknown house flipper who has done nothing to the home and now has it under contract for 175% higher than what he paid for it.

The realtor randomly calls and wants to make sure it is going to come in prior to having the lender order the appraiser....before the phone conversation was over the realtor hung up the phone on me apparently for unloading on her...and explaining I couldn't help her....I thought that was the end of that...I was wrong.....

The next week I am contacted by a lender who wants to order the appraisal for the above referenced property(go figure)...I explain I am familiar with the property I will not know what it will appraise for until the report is complete...he says "great, go forth and conquer, if it doesn't come in, then that's that, I'll send the request right over." Which he did. I charged $1,000.00 which was paid for in the form of a cashier's check a few days later by someone of relation to the seller. (BTW...seller openly admits during the inspection he is going to lose everything if this deal does not fly....followed by a smile and nod from me.)

After reviewing the sales contract, the Special Agreements Section state that the "seller will contribute to the buyers down payment program"???? What is this I ask, and how much??? I call the LA who says she is uniformed on the interworkings and that I should contact the Lender. So I did...the Lender goes through this big explaination that this is a Community Marketing Program....somthing about twelve percent...then another something about this is of no benifit to the buyer(it was clear he was reading from something). Still he would give no dollar amount of the concessions or buyers assistance. The Lender had a call he had to take but was going to see if they could get that removed from the contract and he would get back with me later....LOL...BTW....Per contract, borrower is putting 1/3 of the contract price down in the form of a down payment.

This deal has stunk to high heaven from the begining but my approach was, who cares...they paid for an appraisal that is what they will get...who cares if it doesn't come in. I think they are trying to pull the wool over my eyes and I feel like there is something going on with the down payment(perhaps it is being funded at closing??) I called an LO I do business with who says that it is over his head and he has never heard of such a thing...but to beware of the parties involved...which I already knew from previous dealings...How can I disclose the amount of the contribution??? What if they just omit the info and fax the contract back over?? Thanks for any advice... Fire away!!!
 

CANative

Elite Member
Joined
Jun 18, 2003
Professional Status
Retired Appraiser
State
California
Relax and do the appraisal. Just report what you know and don't know about the contract and the terms. Don't use this as a comp sale for other appraisals. LOL.
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
The lender/investor must have a maximum percentage of contribution by a seller for either a second mortgage or closing cost. It is my understanding most first mortgage investors on the secondary market do not buy a loan where the seller gave and holds a note.

I would seek the author of the sales contract and have them explain the contract. I would state in the report, the person who gave you the copy of the contract and also the date given to you. The contract you review may not be the one the lender has.
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
Mr. Sutton,

Oh man!

Ok, Buddy...... ;) Do NOT participate in allowing them to send you over a "New" amended contract that somehow persuades you to not discuss the contract you have in your contract analysis. You need to clearly place in print in that appraisal report that a bunch of the terms are being withheld from you, so hence you cannot analyize the sales contract. As well as stating this is not normal.

Next, your sales history of that subject had better be a Reader's Digest version of War and Peace. As well as relating it to the current market and your final value conclusion.

Then, before you send that puppy, be very clever and hide your final conclusion of value in some very strange places in the report. I have Bradford's "Clickforms" and would use a tool called "FreeForm Text" to place it in borders or hide it in an Adobe hidden signature within the PDF somehow. In otherwords, prepare for your PDF to be hacked.

In the last month I had a similar sort of thing regarding a FSBO and the sales contracts. I had stips wanting me to remove a seller carry back second mortgage information from my analysis with a supposed "new" contract........ only the new contract had the same dates of signature as the original and a few other lovelies. I flat told the client I would change absolutely nothing until I had proof the seller and buyer had used a real estate attorney to draw up new contracts... and then it was going to be a new appraisal. I get really cranky when folks try to pull me into real estate loan fraud.

Webbed.
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Sean,

Is the bathroom mirror shaped like a triangle?
 

Non Sequitur

Elite Member
Supporting Member
Joined
Feb 14, 2002
Professional Status
Certified Residential Appraiser
State
Louisiana
Greg Boyd said:
Relax and do the appraisal. Just report what you know and don't know about the contract and the terms. Don't use this as a comp sale for other appraisals. LOL.
Amen.

Why did you make a stink over the seller concession? Report what's in the contract and let the lender decide. What would happen if the buyer had 5 donkeys and 2 pigs as a down payment? Call B.S. all you want but FHA accepts "bartered goods" as a DP. If you ever see this your job is to report it and let the lender decide.
 

Obsolescent

Senior Member
Joined
Jul 6, 2004
Professional Status
Certified Residential Appraiser
State
Minnesota
I'd report what is in the contract and mention that there is a seller concession...that the contract indicates the seller will contribute to the buyers down payment but that it did not indicate an exact dollar amount of that concession. The underwriter will take it from there. Appraise it for what it is. I'd click the Yes box in the section that asks if the buyer is getting some financial assistance and comment on it there too.
 
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Sean Sutton

Thread Starter
Member
Joined
Jun 19, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
That would be the one Marcia.
 

Sean Sutton

Thread Starter
Member
Joined
Jun 19, 2006
Professional Status
Certified Residential Appraiser
State
Missouri
LOL...they just faxed over the new contract, it says...."seller has an agreement with payout one to utilize the community marketing (CMP) payment of CMP services made at closing." WTF does that even mean???LOL...I guess I will just let the lender know what the contract says and that I have no clue what it means and I could not find out what the dollar amount of the contributions were and that nothing was able to be verified. Thanks for the input.
 
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