Bad Appraisal on Refinance

[CThomp]

Has anyone gotten a bad appraisal, had a reappraisal done, and then gotten their money back from the bad appraisal?

I'm in the middle of a refinance. I had started the process up a while agodirectly with my current lender. They did the appraisal. The appraiser came from out of town and called my house a 2/2.5 when it's actually a 3/2.5, and picked 3 comparables whose sales were a year ago and I think all short sales. I ended up dropping the refinance because there were to many hands in the pot on my lenders end and rates dropped kinda dramatically after I started the refi. Tons of emails an GFE's from to many people within the lender. Mind you this is a major banking institution in the southeast. But being major is probably why it was such a pain the the ass.

I started the process back up again but decided to go with a reputable broker. Everything has been dramtically smoother. AND...i'm still going to be with my current lender. Lender sent out entirely new appraiser. This time the appraiser is local. Local appraiser does things correctly and uses SIX COMPARABLES as opposed to THREE, Nice. AND only one of the 6 comparables is a short sale. Appraiser puts me right in the middle giving me required Loan to Value ratio for me to manage my escrow myself which will primarily just be my property taxes. My homeowners insurance can bill me monthly like they do my car insurance.

Has anyone had a similiar experience and gotten their money back? I waited to have the second appraisal done so that I could have something to compare to and to see if I actually had an argument.

[homebild]

Getting an good and fair appraiser is a roll of the dice.

Lenders maintain a list of appraisers and 'rotate' through the list so none is favored and the random nature of their opinions offers a less biased and more true picture of real estate value.

I had a similar situation with a spec house I built and got on the market just when the bubble burst.

I decided to move into the spec house when I could not sell it so I was using the same lender who issued the construction loan to convert it to a permanent mortgage.

Appraiser was a complete moron undersizing my house, calling the finished main level a 'basement' and a host of other bizarre claims.

The net effect was the appraisal came in so low (nearly 20% lower than the appraisal done for the construction loan a mere 6 months earlier and other comparable homes within 1-2 miles) that I ended up paying PMI on the mortgage!

It still galls me.

But there was no recourse to get my money back even after I complained to the lender and supplied my own documentation.

I don't suspect you'll have any better luck.

Getting a good and fair appraisal is a roll of the dice.

It is an 'art' based on the appraiser's opinion and mood any given day, and lenders are reluctant to question their findings even if they are completely erroneous.

[CThomp]

great. This is gonna be fun.

Sorry you have the same kinda luck. The bank wanted to actually raise my rate because of the bad appraisal. It's crap.

[homebild]

great. This is gonna be fun.

Sorry you have the same kinda luck. The bank wanted to actually raise my rate because of the bad appraisal. It's crap.

No.

It's not crap.

It's the new mortgage reality.

In my region we have builders with signed contracts with customers wanting to build and none can get financed.

They have good credit, the mandatory 20% down and still cannot secure a construction loan or mortgage even when the comps and appraisals come back ok.

Biggest problem is the potential owner's debt-to-income ratio which for most has gone to pot.

Since personal investment portfolios have dropped in value along with existing home prices, even with perfect credit and money down, folk's debt-to-income-ratio is bad all around...so banks don't want to lend to those whom they consider bad risks.

Couple that with banks having no where to sell their mortgages and they would simply rather not lend money on mortgages or home equity loans when they can make more money putting their capital into someone else's savings accounts.

It's the new mortgage and lending reality for real estate and I'm afraid it is here to stay...

[CThomp]

This explains why my lender is so up my arse about income.

This is a terribly viscous cycle.