Posted on: 15th Oct, 2011 09:06 am
We purchased our home four years ago and had an appraisal of $309k; since then we've added 1050 sf to the home, which is in a stable community where prices have not dropped during the recent financial crises. We started the re-fi process with our bank, paid $500 for an appraisal, and got back a completely erroneous product. The appraisal had our address wrong (so the map, neighborhood description, and comps were based on the wrong property) and he shorted our acreage, said we had no basement, pool, washer or dryer (which we do)---and made numerous other factual errors (wrong number of bedrooms, mislabed pictures, etc.).
We challenged the appraisal, and that process resulted in a committee on the other side of the country contacting the appraiser, who changed the address (but not the map, neighborhood description, comps, etc.) as well as the property size (but not the value, as he said there was no value for 1/3 of an acre (going from 1.06 to 1.39 acre). He stated he stood by the other items on the appraisal and that the value was, indeed, only $288k ($21 lower than the previousaly appraised value) and that the increased square footage (1050 sf since the previous appraisal) was valueless because it made our home "overdeveloped" for the neighborhood. Our home is nowhere near the largest home in our nieghborhood--this information might apply to a home in the "wrong address neighborhood" but he did not adjust the appraisal to reflect the home's true location, only the actual reported address.
We challenged the committee's acceptance of the appraisal and were told by the bank (Wells Fargo) that the only way to overturn the appraisal was to have the appraiser make the change. We cannot pay to have a different appraiser and there is no other review process. We left a message for the appraiser and he refuses to call us back. We have given the bank proof of the factual errors and we had an independent appraiser provide more appropriate comps to show that the appraisal is flawed. The bank has told us that (a) they have had numerous complaints against this appraiser but no one has filed a formal complaint with the state, giving them grounds to drop him from their pool, and (b) they agree this is a flawed appraisal, but their hands are tied. We have gone as high as a bank vice president for the region to get help, without resolution.
At present we have the option to cancel the whole process and start over (losing our lock on the low price, and paying another $500 to have a different appraiser do another appraisal with no guarantee of an improved value) OR accepting the flawed appraisal and closing the re-fi (which means we will have to pay mortgage insurance because of the low valuation).
Either way, the appraiser will get his $500 despite the numerous errors he refuses to correct. We WILL file a complaint with the state, but meanwhile we are stuck on the re-fi.
We are considering going elsewhere with the loan--but the bank advised us NOT to make the Sept. mortgage pmt (as we were planning to close by mid-Sept. and it would throw the numbers off) and when the late penalty hit for a late payment, they said they would credit it at closing; with the contoinuing delay, we were advised to make the Sept. payment at the end of Oct. but not to make the Oct. payment so now our credit (which was spotless until now) shows two late mortgage payments in a row.
Are there any recommendations for how to proceed? Is this an isolated issue or common today? Any help appreciated. ~ Teresa
We challenged the appraisal, and that process resulted in a committee on the other side of the country contacting the appraiser, who changed the address (but not the map, neighborhood description, comps, etc.) as well as the property size (but not the value, as he said there was no value for 1/3 of an acre (going from 1.06 to 1.39 acre). He stated he stood by the other items on the appraisal and that the value was, indeed, only $288k ($21 lower than the previousaly appraised value) and that the increased square footage (1050 sf since the previous appraisal) was valueless because it made our home "overdeveloped" for the neighborhood. Our home is nowhere near the largest home in our nieghborhood--this information might apply to a home in the "wrong address neighborhood" but he did not adjust the appraisal to reflect the home's true location, only the actual reported address.
We challenged the committee's acceptance of the appraisal and were told by the bank (Wells Fargo) that the only way to overturn the appraisal was to have the appraiser make the change. We cannot pay to have a different appraiser and there is no other review process. We left a message for the appraiser and he refuses to call us back. We have given the bank proof of the factual errors and we had an independent appraiser provide more appropriate comps to show that the appraisal is flawed. The bank has told us that (a) they have had numerous complaints against this appraiser but no one has filed a formal complaint with the state, giving them grounds to drop him from their pool, and (b) they agree this is a flawed appraisal, but their hands are tied. We have gone as high as a bank vice president for the region to get help, without resolution.
At present we have the option to cancel the whole process and start over (losing our lock on the low price, and paying another $500 to have a different appraiser do another appraisal with no guarantee of an improved value) OR accepting the flawed appraisal and closing the re-fi (which means we will have to pay mortgage insurance because of the low valuation).
Either way, the appraiser will get his $500 despite the numerous errors he refuses to correct. We WILL file a complaint with the state, but meanwhile we are stuck on the re-fi.
We are considering going elsewhere with the loan--but the bank advised us NOT to make the Sept. mortgage pmt (as we were planning to close by mid-Sept. and it would throw the numbers off) and when the late penalty hit for a late payment, they said they would credit it at closing; with the contoinuing delay, we were advised to make the Sept. payment at the end of Oct. but not to make the Oct. payment so now our credit (which was spotless until now) shows two late mortgage payments in a row.
Are there any recommendations for how to proceed? Is this an isolated issue or common today? Any help appreciated. ~ Teresa
Hello Guest,
Unfortunately I don't have much good news to tell you. As far as the appraiser is concerned, it is true your only real recourse is a complaint with the state. You could sue him, but as of now, there is no financial loss other than the appraisal fee. I would suggest getting a new appraisal done by another appraiser and if Wells Fargo isn't willing to do that for you, you may want to consider going with someone else.
If you do decide to work with someone else, I would like to offer a suggestion. Instead of working with one of the mega banks, perhaps try contacting a smaller, local lender or an independent mortgage broker. They will be able to shop for the best rates and the best programs to fit your needs and I am willing to bet you will get better customer service and communication throughout the process. You just don't get that from a bureaucrat.
As an appraiser, I don't like hearing stories like this. Since the proliferation of the appraisal management companies, middlemen in the appraisal process, controlling the processes and directing the assignments, it is sometimes easy to forget the value you bring to the end user of the reports, not to mention the responsibility we have to the public trust. So on behalf of the appraiser community, I apologize for your experiences and wish you luck on whatever path you decide to take.
Unfortunately I don't have much good news to tell you. As far as the appraiser is concerned, it is true your only real recourse is a complaint with the state. You could sue him, but as of now, there is no financial loss other than the appraisal fee. I would suggest getting a new appraisal done by another appraiser and if Wells Fargo isn't willing to do that for you, you may want to consider going with someone else.
If you do decide to work with someone else, I would like to offer a suggestion. Instead of working with one of the mega banks, perhaps try contacting a smaller, local lender or an independent mortgage broker. They will be able to shop for the best rates and the best programs to fit your needs and I am willing to bet you will get better customer service and communication throughout the process. You just don't get that from a bureaucrat.
As an appraiser, I don't like hearing stories like this. Since the proliferation of the appraisal management companies, middlemen in the appraisal process, controlling the processes and directing the assignments, it is sometimes easy to forget the value you bring to the end user of the reports, not to mention the responsibility we have to the public trust. So on behalf of the appraiser community, I apologize for your experiences and wish you luck on whatever path you decide to take.