Hi Everyone. I applied for a cash-out refi for a rental property and when we were finally ready to close the bank decided the appraisal of 160K needed to be reviewed. So they ordered an appraisal review from another appraisal company who disagreed with the first appraisal and claimed my house was worth $35K less than the original appraisal. I was obviously very upset and told my mortgage agent that the appraisal review was erroneous and subjective. My agent told me I could write an explanation to the bank as to why I think their review was inaccurate and I did. They responded that they were staying with the lower appraisal but gave me no explanation and they never gave me an explanation as to why they flagged the original appraisal. I don’t know what to do. This appraisal review is costing me $24,500 of the cash out I was expecting. I don’t know if I should back out and start the process all over again with another bank or is there some way I can fight the bank over this? Or am I just stuck?
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Original appraisal flagged, new appraisal company hired, lowered appraisal by 35K
- Thread starter jim10011
- Start date
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adjusterjack
Senior Member
There's no fighting it. You meet the lender's criteria or you don't get the money.
You can walk away from that lender and try another.
You can walk away from that lender and try another.
justalayman
Senior Member
Have you contacted the original appraiser? 20+% is a large discepancy. You haven’t provided the state so it’s impossible to review appraisers regulations.
What would you have said if the original appraisal came in at $125,000?
What would you have said if the original appraisal came in at $125,000?
Zigner
Senior Member, Non-Attorney
...and how would you fight it? Perhaps by having an independent appraiser that YOU pay for give his/her opinion of the value of the property...?
justalayman
Senior Member
Why? Are you a licensed appraiser that believes the other licensed appraiser made an error?
Maybe the first guy is actually in error. Ever consider that?
Appraising real estate isn't rocket science. Rentals use 2 methods for valuations, comparables and the income method. The property is worth $160K using both methods. The appraisal reviewer made subjective arguments to justify his valuation that are not evidence based. Also, I failed to mention that this appraisal reviewer was the one who did the appraisal for my current mortgage which was even lower and we had a heated debate over the issue in 2011. But the economy and housing market was still very bad at that time so I let it slide and we closed the loan. If you Google L&S Appraisals in Sterling Heights, MI you will see I am not the only one they have done this to.
Zigner
Senior Member, Non-Attorney
Then refute it with evidence (ie: your own appraisal). There's really no use complaining here.
adjusterjack
Senior Member
Then take your business elsewhere.
There is no law that obligates the lender to lend you money.
And this one obviously doesn't want to lend you the amount that you want.
There is no law that obligates the lender to lend you money.
And this one obviously doesn't want to lend you the amount that you want.
Yeah that's what I am thinking too.
What boggles my mind is that banks are in business to make money. And the more they loan out, the more they make. So why are they fighting so hard to lend me "less" money? I mean it's not like I am asking for an artificially high appraisal plus a 100% LTV loan. Even IF the appraisal was a little high, they are only loaning me 70% LTV so they have a 30% buffer zone right off the bat to make up for any appraisal miscues.
justalayman
Senior Member
But they usually don’t make money if a borrower defaults and they foreclose if the appraisal is improperly high. They have to be able to sell the house for at least what they are owed plus the costs of the activities (legal fees, advertising, brokerage fees, costs to maintain while holding the property, plus all the typical documents, not counting what happens if the borrower trashed the house or the market tanks). That 30% isn’t a very big buffer once you start figuring all that into the deal.
Appraisers are licensed by the state. If you believe there is a problem, report it to the state licensing agency.
Great idea I am gonna report him. Thank you!!!
Zigner
Senior Member, Non-Attorney
Report him for WHAT?
You have no idea which of the two appraisals was incorrect, nor do you even have any evidence that either of them did anything wrong.
Why are you so against getting your own appraisal? Afraid of what you might discover, perhaps?