Refinance appraisal rejection

mroberts, welcome to mortgaghefit

it is likely that you are disappointed with the way bank has put down your request.

but again you need to pay for the appraisal fee (which will be shown as processing fee if they approve your loan)

"Also, do I have any recourse in making them accept this certified appraisal?
"

You can not force them to accept your certified appraisal results.as they are not bound to give you the loan.

keep in touch........
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Hi mroberts,

In my opinion, if you want to continue with the same lender then you will have to let them use their own appraiser to appraise your property once again. As far as I know, you cannot force a lender to consider a particular appraisal.

Thanks

I do not see any reason of rejection in case property is evaluated high.

Since you have used your own appraiser, research them first and ask your lender to cross check them for any potential issues that may delay the process.

Dont pay for a formal appraisal

Since appraisers use "comps" (comparable market sales) of local properties sold within the last six months to value your home, make sure to work with a great loan officer who will leverage their knowledge to research comps in your area, before ordering the appraisal.

Thanks for the replies! If they reject this appraisal can I just accept pmi or do I still need a new appraisal?

Welcome back Matt,

If you want to refinance your property, then you'll have to go for another appraisal.

I don't think there's any guarantee a lender will accept an appraisal even if it comes from one of their own appraisers. We are currently trying to sell our home (short sale) and we have a buyer. The buyer's lender sent out an appraiser last week, but we just learned that the appraisal was rejected because the underwriter thinks it came in too high. I can understand that happening if an independent appraiser was used. But this was one of the lender's own appraisers. It begs the question then, if a lender doesn't go by the appraisal, what do they use to determine the value of the property?

Best of luck,
Cat

Welcome cbroberson,

It's really surprising that the lender is not accepting the appraisal done by it's own appraiser. I suppose as the properties in every area are losing value, the underwriter must have thought that the appraiser may have wrongly appraised the property. Did you speak to your lender as to what steps they would take now?

any appraisal report is subject to review by an underwriter. if that underwriter feels that the comparables selected were inappropriate, or if the adjustments made were inappropriate, correction is generally called for. i think it's unusual for an underwriter to downright reject an appraisal report, though it's not unheard of.
are there issues with the house at all, that might lead the underwriter to feel that the appraiser had overlooked things or underestimated situations?
it's also very rare these days for a lender to have an inside appraiser - are you sure it wasn't someone hired by the lender, albeit someone they have great familiarity with?
i definitely feel you need to get to the bottom of the situation, to see if there is any remedy that might afford you the opportunity to continue your efforts to sell the home. your realtor - assuming you have one - ought to be in on this also.

You had a valid appraisal. The lender used an automated value system which are nowhere near as accurate as onsite appraisals but has the right to reject anybody. The borrower has the right to give his business to a competitor and to follow up by advising others to avoid the unfair lender. Meanwhile the suggested appraisal will not be done by an objective, independent third party, so don't waste your money. They should not have made you go through the torment of uncertainty and expense of an appraisal if they didn't like your loan package but that is used as the final excuse to back out of a commitment. I have been in this business a long time and remember when the market was bad but some areas experienced an upturn that lenders would not acknowledge. The borrowers sued the lenders and won in court. One judged told a lender that the applicant should enjoy every dollar of value his property commands and that no one should deny the borrower of that value. It is good to have an independent appraiser review the rejected appraisal report for backup. It costs less than a new appraisal.

Underwriters are not qualified to review an appraisal or to comment on the comparables unless they inspected them in person and have a valid appraiser's license. Most underwriters are promoted loan processors and have no formal education or credentials in real estate so take it from there... knowing their decisions are generally arbitrary at best.

We are in the process of refinancing our home. Our loan officer stated that the appraiser does not need to see the inside of our home. She states if doesn't make a difference it is just cosmetic. I stated also what about the new roof and new doors, shes states well your home has to have a roof and doors it doesn't make a difference. Is this accurate information or should this be a red flag?

Hi Teresae,

In order to get a proper valuation of your property, the appraiser needs to look into the inside as well as the outside of the property. I don't think the loan officer is right in saying that the appraiser doesn't need to see the inside of the home.