appraisal done on my town home was inflated?

Question

Only serious answers please!
I took out a HELOC 1 year ago and the appraisal showed up at 220k, i have a 1st mortage at 135k. At that time i had a 2nd at 45k. What they did was pd off my second, payed some cc debt and medical bills totaling out to be 70k. "the even persuaded me to do more and get cash but i did not want any cash" The goal was to prepare me to refinance my 1st mortage that is a ARM and has adjusted 4 pts.
Now i am ready to refinance my 12% 1st, passed the credit scoring part ect then had a appraiser comeout---well he came up with 185k. nice guy and explained it to me with me being concern with the value 220k last year. he looked into it for me and told me no way that should have been valued at 220k, if a apprasial would have been done then should have been 183k. I called the mortage company that holds both loans and they will do nothing I explained my situation about that appraisal, they told me they used a AVM and there must have been a glitch.

both loans are with countrywide, and the HELOC was orginated with countrywide fullspectrum lending divison.
live in a townhome and the appraiser showed me what the homes were sold for at that timeframe. all homes are the same
I know markets have soften, but my appraiser showed me comps in the last two years.
All i want done is countrywide to refinance that first, they inflated that appraisal they should be held accountable right?

Answer 1

Sell it .

Answer 2

many direct lenders have or utilize AVM's to obtain values on residential properties. The problem now is that the appraiser have been under the gun for aggressive appraisals and have therefore settled into a more conservative nature, a good thing, while the AVM's used today are fairly outdated in my opinion and CW...is the most out dated of them all. Country Wide utilizes Landsafe; their own proprietary engine, and Full Spectrum Lending is their subprime division..Glitch my ???Their practices are not unlike those of Amerquest, Household or any other predatory lender that used aggressive appraisal practices to secure a loan for an un-suspecting borrower. I would contact your local Attorney General and relay the information to them. It may be an uphill but I can tell you that the eyes of the nation are wide open now when it comes to these type practices. If you do sell your home today you will clearly take a loss as per the appraisers value. One more note here: The appraiser states that if he had done your appraisal last year, he would have given value at 183k vs 185k today...that's only a 1% increase in value after 12 months... I do find that odd, even with the market today. Considering the market as well, it may be possible that you did lose 40k in a declining market as well, but that may be excessive too. What area are you in? Good Luck!

Answer 3

Ok, now that we know who it was, you might just get lucky.

Countrywide is one of the largest mortgage companies in the US. They are so big, it made financial sense for them to purchase or build side companies. One of which is called Landsafe.

You can argue criminal collusion. They own their appraisal company, Landsafe, which is the provider of your AVM.

Instead of hiring an independent certified appraiser, they only paid themselves for the AVM. They profited heavily at your expense by doing so, as they were able to close a much larger loan.

There's a good reason why appraisers need to be independent of the mortgage companies who contract them. To avoid this.

I honestly don't know if anything can be done, or who can really help you, but I would start with your state regulators for mortgages/real estate. I would argue that you were a victim of fraud.

As I understand the AVMs to work (I've had no direct experience, I hire real appraisers), the loan officer plugs in a value into the system, and the AVM will issue a "confidence" rating. Meaning it's somewhere within it's confidence range. Meet a certain mark, and they let the loan close. Doesn't matter if that number had any basis in reality. It sounds like, in this case, the LO looked at what it needed to be to get the loan closed, and voila, here's your number.

Some states are now trying to limit AVMs, because they can be 20-40% off or worse, especially when they are done as described above. It'd be different if the AVM just spit out a number with no hint as to what you are looking for it to say, but that's not what happens.

State real estate board. State attorney general. ACORN. Start calling all of them. keep pushing until someone helps you.

One more quick note that might help: townhomes are extremely easy to appraise, and it wouldn't be hard to pay an appraiser to go back and pull the comps from that period. Because the townhome community contains so many properties that are almost identical, getting a solid appraised value is easier than a single family detached home. If it can be clearly shown that at that time, no home in your development had ever sold for $225K, that matched your square footage/bedroom count/interior or end unit, your case will look much better.

Answer 4

They don't have to let you refinance now based on an appraisal that was done a year ago, even if they are the ones who did the appraisal then.

It sounds like the appraiser a year ago did a kind of sloppy job. If your credit was really good, they probably didn't worry about it too much because they knew you'd pay it back. "comps" are never exact unless the house is new, they just give a rough estimate.

It would be good to get rid of the ARM and into a fixed rate, though.