Posted on: 16th Sep, 2010 01:34 pm
I'm trying to refi my house. I went through an online "lenders will call you" site and got quotes from several lenders. Apparently this affected my credit score, as the numbers I heard from the lenders dropped each time I heard a new one, and more than one mentioned that the main negative influence on my credit report was due to a lot of inquiries. (And in fact I just closed on a refi of my folks' house, and I had to sign a letter to the lender on that mortgage that the reason for the large number of inquiries was due to a refi on my house that hadn't closed yet.)
(So much for the myth that mortgage lenders inquiring about your credit score doesn't affect your score.)
I chose one and paid a $495 upfront fee to cover "expenses" that would be incurred during the application process and refunded at closing (I took this to mean I paid upfront for the appraisal).
Anyhow, we got an appraisal from an appraiser (selected by the lender, of course) who came in $15k lower than my initial (conservative) personal gut-guess about the value of our house. Which in hindsight was about $20k low in the first place, now that I look at comparables in our neighborhood and do my own valuation based on home price gradients, mean and median home sales, etc. The appraisal report also contained a couple of minor factual errors, as well as having comparables that appeared to have been selected for their low values rather than for their similarity to our home. (The appraisal report even mentions that these are farther away than some others he could have chosen because he felt that they better represented the market than the homes in our own neighborhood would have. Which defies logic, if you ask me, but anyhow that's not my question.) The value of this appraisal was such that in order to continue with the loan, I'd have to bring $8k to closing.
I submitted several sheets of rebuttal, including six additional comparables (including two similar houses on our own street that sold within the last year or so), my home price gradient calculations, and statistical analysis showing why the true value of our home should be like $35-40k more than his appraisal. (That's about 10%.)
The loan officer said that she would send this information in to the appraisal management review board, who would then make a ruling about my objections. (This was about 3 weeks ago.)
She calls me back today, and says she got the revised report, which has been adjusted upwards by $2000 -- for only the factual error on the original report that miscounted the number of bathrooms. No mention of most of the other information I included. No explanation as to why the property valuation they originally reported (or even the revised one) is significantly lower than both the mean and median of the values of even just the comparables they used. They rejected one of my comparables because it was too far away -- but the original report used comparables that were farther away than the rest of mine. What the revised report basically boiled down to was "No, we like the original." (In spite of the problems I pointed out in it, which were mostly simply ignored.)
Now, here's the kicker: the revised report came not just from the same company as the original appraisal, but from the very same individual.
She tells me that due to HVCC regulations, I can't submit my own independent appraisal because it "wouldn't be independent".
How can it be appropriate or legal for the appraiser to be his own arbiter of disputes about an appraisal that he produced?
What are my options here? I'd like to think I could at least get my $495 back and proceed with another lender, but I'm afraid that (1) my credit score is lower now than it was then, purely because of the number of inquiries that happened when I did the lender-comparison thing, and that (2) this absurd (and incompetent) appraisal will somehow affect the valuation that another (competent) appraiser would give.
(And (3) I've wasted an entire month in this process.)
Or can I somehow compel the lender to get a separate appraisal from another company that is truly independent from the first one?
(So much for the myth that mortgage lenders inquiring about your credit score doesn't affect your score.)
I chose one and paid a $495 upfront fee to cover "expenses" that would be incurred during the application process and refunded at closing (I took this to mean I paid upfront for the appraisal).
Anyhow, we got an appraisal from an appraiser (selected by the lender, of course) who came in $15k lower than my initial (conservative) personal gut-guess about the value of our house. Which in hindsight was about $20k low in the first place, now that I look at comparables in our neighborhood and do my own valuation based on home price gradients, mean and median home sales, etc. The appraisal report also contained a couple of minor factual errors, as well as having comparables that appeared to have been selected for their low values rather than for their similarity to our home. (The appraisal report even mentions that these are farther away than some others he could have chosen because he felt that they better represented the market than the homes in our own neighborhood would have. Which defies logic, if you ask me, but anyhow that's not my question.) The value of this appraisal was such that in order to continue with the loan, I'd have to bring $8k to closing.
I submitted several sheets of rebuttal, including six additional comparables (including two similar houses on our own street that sold within the last year or so), my home price gradient calculations, and statistical analysis showing why the true value of our home should be like $35-40k more than his appraisal. (That's about 10%.)
The loan officer said that she would send this information in to the appraisal management review board, who would then make a ruling about my objections. (This was about 3 weeks ago.)
She calls me back today, and says she got the revised report, which has been adjusted upwards by $2000 -- for only the factual error on the original report that miscounted the number of bathrooms. No mention of most of the other information I included. No explanation as to why the property valuation they originally reported (or even the revised one) is significantly lower than both the mean and median of the values of even just the comparables they used. They rejected one of my comparables because it was too far away -- but the original report used comparables that were farther away than the rest of mine. What the revised report basically boiled down to was "No, we like the original." (In spite of the problems I pointed out in it, which were mostly simply ignored.)
Now, here's the kicker: the revised report came not just from the same company as the original appraisal, but from the very same individual.
She tells me that due to HVCC regulations, I can't submit my own independent appraisal because it "wouldn't be independent".
How can it be appropriate or legal for the appraiser to be his own arbiter of disputes about an appraisal that he produced?
What are my options here? I'd like to think I could at least get my $495 back and proceed with another lender, but I'm afraid that (1) my credit score is lower now than it was then, purely because of the number of inquiries that happened when I did the lender-comparison thing, and that (2) this absurd (and incompetent) appraisal will somehow affect the valuation that another (competent) appraiser would give.
(And (3) I've wasted an entire month in this process.)
Or can I somehow compel the lender to get a separate appraisal from another company that is truly independent from the first one?
Hi Scrod!
Welcome to forums!
I would suggest you to go for an independent appraisal in order to know the true value of the property. Once you've known the property value, you should once again negotiate with your lender so that they accept your independent appraisal. However, it will be completely the lender's discretion as to whether or not they would accept your independent appraisal.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I would suggest you to go for an independent appraisal in order to know the true value of the property. Once you've known the property value, you should once again negotiate with your lender so that they accept your independent appraisal. However, it will be completely the lender's discretion as to whether or not they would accept your independent appraisal.
Feel free to ask if you've further queries.
Sussane
I would ask the lender to get a second opinion from another appraiser. The lender cannot use any appraisal which you selected the appraiser and they must use appropriate channels for appraiser selection to stay within the guidelines. For example, many lenders use appraisal management companies to order their appraisals because the loan production staff is not allowed to select the appraiser themselves. The appraisal management company will order the appraisal, conduct the reviews and coordinate the rebuttal process. Your lender can, however, request a new appraisal from the management company and simply request that a different appraiser complete the new appraisal.
As far as your experience in the rebuttal process, it is correct that the rebuttal went to the same appraiser. Noone can change an appraiser's opinion of value except the appraiser himself. The new information is presented to the appraiser for review and then it is up to the appraiser to decide if the new information changes his opinion.
Good Luck.
As far as your experience in the rebuttal process, it is correct that the rebuttal went to the same appraiser. Noone can change an appraiser's opinion of value except the appraiser himself. The new information is presented to the appraiser for review and then it is up to the appraiser to decide if the new information changes his opinion.
Good Luck.
>>(So much for the myth that mortgage lenders inquiring about your credit score doesn't affect your score.)
I'm not familiar with that myth. You have a 14 day window to shop, and all Lender inquiries will be counted as a single "hard" inquiry if you stay within that window. I advise shoppers to get their FICO scores from www.myfico.com first (because it's a "soft" inquiry and doesn't reduce your FICO scores), and tell the Loan Officers to use those FICO scores for their quotes, and tell them specifically that they are not allowed to pull your credit. Later, if you find a Lender has pulled your credit, you can have the Credit Bureau remove it, because the Loan Officer wasn't allowed to pull your credit. Then, when you're ready to move forward with your chosen Lender, tell them they're allowed to pull your credit. That way you'll only have one hard inquiry.
I'm not familiar with that myth. You have a 14 day window to shop, and all Lender inquiries will be counted as a single "hard" inquiry if you stay within that window. I advise shoppers to get their FICO scores from www.myfico.com first (because it's a "soft" inquiry and doesn't reduce your FICO scores), and tell the Loan Officers to use those FICO scores for their quotes, and tell them specifically that they are not allowed to pull your credit. Later, if you find a Lender has pulled your credit, you can have the Credit Bureau remove it, because the Loan Officer wasn't allowed to pull your credit. Then, when you're ready to move forward with your chosen Lender, tell them they're allowed to pull your credit. That way you'll only have one hard inquiry.
