interior photos | refinance appraisal

When I first started in this business about 10 years ago, the firm I worked for had a policy for all appraisers to take interior photos of all rooms in the house. For the most part, these photos were kept in a database for internal use only and were rarely included in the appraisal report unless we wanted to show specific additional features which added significant value.

They came in handy on a few occasions where the property was renovated (representing the top of the market in value) and a few years later when the property went into foreclosure, the tenants had trashed the place. When the lender called and questioned us on the condition of the property, it was good to have interior photos in our database to show them.

We all felt it was good practice to take these photos and I still do to this day. But I don't believe it was common practice for a lot of appraisers and as a result, lenders and mortgage investors are now requiring these photos in the report. It is simply for a level of protection and verification to the condition of the interior not so they can look at your personal belongings.

In the past, if homeowners specifically objected to the interior photos, it was no big deal. I just didnt take any or I would take only minimal photos which depicted condition but did not include any belongings. Today, because of new regulations, it is no longer in our hands. I had one situation recently where a homeowner objected and the lender would not approve the loan until those photos were in the report. But it is not so much a requirement by the lender as much as it is a requirement in the secondary mortgage market. Fannie Mae and Freddie Mac now require certain photos and if they are not in the report, may not purchase the loan from the lender.

While I do agree it may seem somewhat intrusive, it is definitely a sign of the economic times and lenders/investors want to protect themselves as much as possible.

Taking photos, many photos even is standard practice today. If you don't want the pictures taken, all you have to do is cancel your loan application and go somewhere, where they have a portfolio loan available and do not have that requirement, that should fit with about 1% of the lenders.

Typically on a small house I will take about 20 photos, large ones I've taken 60 to 70 photos, they make really great exhibits and help the client (the lender) and the intended user better understand what you are asking them to invest in. Yes invest, a loan to you is an investment by the lender.

Join LinkedIn a professional network (it's free) and then look for and become a part of the USPAP, Uniform Standards of Professional Appraisal Practice Group on LinkedIn and look for us there. We have 1,600 members now and growing. Our members include more AQB Certified USPAP Instructors than any group I am aware of, with the exception of The Appraisal Foundation itself. We also have multiple people in leadership from The Appraisal Foundation, the Appraisal Section of NAR, NAIFA, AI, FannieMae, Freddie Mac and numerous regulatory Appraisers and investigatory Appraisers, truly a unique mix. In addition to those there are many other Appraisers, lenders, AMC representatives, Appraisal school representatives and others with an interest in USPAP and what it is we do.

I'll opine that even with portfolio deals, lenders are going to be seeking standard appraisals, i.e. with photos of the interior as well as the exterior. An invasion of privacy? I don't think so, although every person who looks at the photos will pick up on things that appear...like the Christmas trees in both living room and rec room; like the toilet seats that are forever up rather than down; like the Dallas Cowboy decals all over the teenager's wall (or was that Dad's wall?).

It's human nature to notice these things, and I can understand a homeowner's reluctance to share; but I also understand a lender's need to comply with secondary market requirements.

I'll opine that even with portfolio deals, lenders are going to be seeking standard appraisals, i.e. with photos of the interior as well as the exterior. An invasion of privacy? I don't think so, although every person who looks at the photos will pick up on things that appear...like the Christmas trees in both living room and rec room; like the toilet seats that are forever up rather than down; like the Dallas Cowboy decals all over the teenager's wall (or was that Dad's wall?).

It's human nature to notice these things, and I can understand a homeowner's reluctance to share; but I also understand a lender's need to comply with secondary market requirements.


YES THIS WAS ME COMMENTING.

in our age, even the government computers are not safe from hackers, and no one is safe from unscrupulous people who'll sell any company information to the highest bidder. how sure are you about the security of your company's database? what about the possibility of it being breached, and all the interior photos that have furniture and belongings in them being made available to the thieves? casing a home will never be difficult again. or what about the pictures of your belongings being added to your dossier by any of the numerous law enforcement agencies? if the house is being sold, then interior photos are fine. but if the home equity loan is being refinanced, and the people will continue to live at the property, then the interior photos are a major intrusion of privacy! also, if the loan applicant has cheap or shabby furnishings, this will psychologically prejudice the lender and decrease the applicant's chances of approval for a loan. it's amazing: in order to protect their privacy, people install a software that will remove geographical coordinates from the digital pictures, yet they are forced to put their inner sanctum on public display. outrageous!!! p.s. i'm not in the real estate business, just a concerned home-owner.

WOW

I quote: "If the loan applicant has cheap or shabby furnishings, this will psychologically prejudice the lender and decrease the applicant's chance of approval for a loan."

I'm afraid you know nothing about the lending business and, for some reason, you seem to harbor ill feelings towards the people (yes, normal people for the most part) who sit down at their desks and review loan files for the purpose of granting and/or denying loans.

"Cheap" is an awfully hard word to define in a situation such as you describe - how does one look at a 4x6 (or so) photo contained within a report and determine that the homeowner bought his or her couch at the Dollar Store? I defy you to point to the underwriter who'd stoop so low as to even consider such a thing. "Shabby" is also a rather argumentative fashion in which you consider the apparent "shabbiness" of the underwriter's mind.

A major invasion of privacy? I think not. Consider this: a borrower (let's say me) wishes to refinance. I tell the bank my house is worth $400,000, and I want to borrow $300,000. That's great -75% ltv, so it works out well and I have the income and "unshabby" credit to support it.

But I don't want my privacy invaded and refuse to allow the appraiser to photograph the interior of my home, which is actually cheap and shabby by my standards. There are holes in the interior walls, and exposed nails, peeling paint, but only a few stairsteps missing.

By your standards, it would be a major intrusion of privacy, I suppose, if the appraiser mentioned these things in his report; so they don't get mentioned.

Of course, if all this were taken into consideration, you'd recognize that there's no way my home's worth $400,000, and that it wouldn't even sell for $300,000.

How is that a fair method by which a lender can determine how much to grant for a loan that I'm seeking?

Pretty shabby, I think.

Worrying about hacking from I don't know whom probably ought to keep us offline permanently.

In all seriousness, though...the interior photos are here to stay, and they do constitute data that is valuable in assessing someone's overall financial picture combined with the collateral being offered on a mortgage loan request.

I definitely have to agree with you George. While I can agree with some of our guest's suggestions that some "sociological" prejudice can occur, it is pretty rare. As an appraiser on the front line, we actually have certain rules to follow when selecting the angles and rooms for our pictures. For example, we try to be conscious of family photos and religious symbols and keep them out of the photos. There have been law suits filed against lenders because the borrowers felt they were denied their loans because of race or religion. We also try to be aware of social stigmas and ask homeowners to remove things like the beer bottles off the counters before we take pictures of the kitchen among many other things.

I would say that any mess in someone's house or shoddy furniture, is the least of problems for most underwriters and definitely not something that isn't seen on a daily basis. As an appraiser, I walk into many homes that may seem a little cluttered or messy but are by no means the worst I have seen and I often overlook most of it. The ones that bother me are the homes that smell so bad, I can't get five steps inside before I want to hurl. And yes, they do exist, and people live there.

I do tell people before I come out that I will be taking interior photos. This gives them an opportunity to tidy up a bit and hide anything that shouldn't be seen. But it has been my experience that people who object to interior photos, also have something to hide. Very rarely are people nervous about me taking a picture of their sofa. They do, however, care about me taking photos of the hydroponics operation in the basement or the sexual paraphernalia in the bedroom. I had one homeowner that was adamant about which rooms I could take pictures of and which ones I couldn't. As it turned out, he had a little side business, a mechanics shop in his basement/garage, and over $50,000 of equipment. He said that with so much equipment, he didn't want people to know he had it and come steal it. The truth to be told, he didn't want anyone to know about the extra income that wasn't reported to the IRS.

I personally would be less worried about the interior photos of my home and much more concerned about the protection of my other documents. Think about it. You give a lender your bank statements, tax returns, pay stubs, social security number, rights to dig into your financial history, everything someone would need to steal your identity, and you are worried about interior photos? Really?

That's a great argument you ended with, Ben; you're so right that we, the people feel free to drop off our bank statements, pay stubs, etc. on empty desks (when we can't find someone quickly enough to meet our agendae).
And though every lender certainly has a policy concerning the shredding of documents, that's no guarantee that someone's SS number, someone's random statement, etc. didn't make it into the regular trash by mistake.


Worried about the pictures? Oh well..I enjoyed reading about some of what you've seen - none of my appraiser friends had ever regaled me with the likes of those.

>>yet they are forced to put their inner sanctum on public display.

Not. Appraisals aren't public - they're private. Only a few Professionals have access to it.

What about when an appraiser comes in and goes through my medicine cabinet in my kitchen, picking up my prescriptions, reading the labels and taking pictures of them!!! YES, this happened to me this week. That is invasion of privecy and I am LIVID!! Never trust anyone who comes in your home. There is absolutely no reason for this and these appraisers are getting away with SO much. More and more pain killer addicts, and yes, they are appraisers too! We need to put a stop to these people.

It's quite surprising that the appraiser will go through your medical prescriptions or read the labels on the medicine!!

George makes a very good point. There's lots of information that can leak out about you and you have little or no control over it. I had an appraiser at my house today for a refinancing. He wanted to have the freedom to take pictures of anything he choose. Sorry, no. This is my space and before you take any photo in my home you need my permission. This I have control over. He didn't like that answer and left. The only photos that are needed should relate to improvements or problems as they relate to the property value and the lenders investment. I contacted the lender and they agreed. Photos of the kitchen and bathrooms where the most money is invested is all they wanted. So to all appraisers out there, don't think that just because you have a license or certification and a lender backing you up that you have a right or that its necessary to take lots of photos of an interior space. That's why you have a pencil, clipboard, and a form to fill out. That's why you have an education in this line of work. I think it's more likely appraisers take lots of photos because they don't like writing notes and don't want to miss anything. They're cozier back in they're office typing it up and using the photos after the inspection. Sorry not in my house! Come prepared with writing materials and spend the time doing your job while there. You can have a few photos and that's all!

Thanks for sharing this, Michael!! :)

I refi'd less than 3 years ago and on the first refi no one came in just took pictures of my house front and back. This time they want pictures of the interior (my land is worth more (379,000) than the house (260,000) and I am asking for a mere 50,000 and I really don't care what an appraiser says its invasion of privacy period. As one poster said I will control the pictures period...if ya don't like it or like my credit score which is in the 800's and I pay on time and have never been late ever, I will take my business somewhere else.
The experts forgot to mention that only banks that have backing from fannie and freddie have this requirement, as the bank does not accually hold the loans. The banks that hold the loans such a Union does not require this and have a stream line program for customers already with their bank and just refi'ing