Okay,Can someone please shed some light on why land safe appraisers are killing sales with their values? A few years ago aren't these the same group of appraisers countrywide was using to do there loans? I have now had 2 deals go sideways because of values from appraisers (of which both have not been from the local area).As many experienced REO agents know the banks, our clients have an appraisal on file prior to ever listing the property. On one particular home my BPO price was conservative and below both the appraisal and 2nd agent's BPO. However after 4 days on the market this 4400 sq ft home, in what I would consider good condition, located near a golf course community had 3 offers. So we go to escrow with high offer and guess what the lender's appraisal came in 17K below purchase price and 30K below the banks appraisal on file. (If we had these same appraisers’ 2-3years ago we probably wouldn't be in such a mess now RIGHT!!!) At this rate our market will never recover...Looking at the appraisal the appraiser noted this home in average condition.. I'd beg to differ but, I'm not an appraiser. The most alarming thing is the adjustment for a property same age and style in good/superior condition. A $40,000 adjustment seems extreme to me for a home in which no repairs are noted, and was built within the last 5 years. Keep in mind, in the report the appraiser notes no needed repair or deferred maint; however subject property is in average condition. (I will upload pics in a few.) Any comments to help shed some light on this would be great. Has anyone else had similar experiences? I'm sure this deal will be as good as dead and countrywide now B of A can forget about ever writing the loan in this one because the bank is not going to take that hit, In fact they will lend on it before they allow that to happen.Here's my question. Are these the same appraisers countrywide have been using to price their REO's? If so this would explain why countywide is listing their REO's below everyone else and getting multiple offers. Well if this is the case why are they accepting offers over appraised value, better yet why are they lending on them since most countrywide REO are requiring one to be pre-approved with Countrywide? Comments Please..
Countrywide required customers to hire one of its subsidiary companies to obtain appraisals without providing the proper disclosure forms, and overcharged them for the appraisals, according to allegations in a Racketeering Influenced and Corrupt Practices Act (RICO)-based class-action lawsuit filed in U.S. District Court in Seattle this week.
The suit, filed by a group of homeowners in Washington state, alleges Countrywide forced homeowners to use its subsidiary company LandSafe to obtain appraisals without providing an affiliated business arrangement disclosure that notifies customers that Countrywide owned the appraisal company, as is required by the Real Estate Settlement Procedures Act (RESPA).
“As we investigated Countrywide for our clients, it was immediately obvious that Countrywide is a well-oiled operation,” said Steve Berman, managing partner and lead attorney at Hagens Berman Sobol Shapiro, the law firm that filed the lawsuit. “Unfortunately, the company's efficiencies are focused on soaking every penny from consumers and independent appraisers in ways we believe violate the law.”
The suit further alleges LandSafe would outsource the appraisals for as little as $140, but then charge customers like Washington residents Carol and Gregory Clark, plaintiffs in the case, as much as $410 for the service.
In 2007, The Clarks refinanced their mortgage with Countrywide, the nation's largest mortgage company, and now, a subsidiary of Bank of America. The suit represents them and seeks to represent all homeowners that purchased new or refinance mortgages through Countrywide and LandSafe.
Because of its dominance in the market and ownership of LandSafe, Countrywide, the suit claims, had excessive influence on the appraisal process that took away from the independent verification of properties' value, and that hundreds of thousands of homeowners are victims of this scheme.
The suit also said Countrywide blacklisted appraisers that refused to work for the fee schedule set by LandSafe, putting them on its “Field Review List,” a database of appraisers Countrywide refused to use unless the mortgage broker also submits a report from a second appraiser.
“When you control the entire appraisal process, including your hands around the necks of appraisers financially speaking, you have a lot of influence," Berman said.
A spokesperson for Bank of America said the company had not been served with a copy of the lawsuit, but that the company thinks the suit has no merit.
OHHHhhhhh.....Jonathan, you just hit on my biggest complaint with the "Appraisal" Industry and that is, the don't appraise anything and, you can quote me on that one.
Ok, so the appraiser gets and order to go out to a home and appraise it. Well, on the paperwork he got from the bank, the borrower’s requested loan amount appears. That is why it happens that the appraiser’s appraisal numbers always match exactly the loan amount, which is obtained directly from the Purchase and Sale offer. So, I have to ask, what is the appraiser appraising?
This also happens in the reverse. When a bank has a REO, they send over the appraisal order which so happens to have the remaining balance and or lowest net amount the bank is willing to take hence, why some banks price their REO’s way under value and get multiple offers immediately.
Now that you understand that, it gets worse. So, lets say Johnny Home Buyer goes into a bank and gets a loan for $150,000.00 however, doesn’t want to spend that much so he goes and puts an offer on a REO that was priced under value at $100,000.00. He finds out that the home has multiple offers so he submits his final and best at $130,000.00, he really wants the home. He got that number from the Selling Agents comps, which showed the home was worth $140,000.00 so, even though he is paying more than list, he is still getting a deal and feels really good about his offer.
So the banks appraiser (buyer’s bank) goes out and appraises the home at $120,000 due to a variety of factors, (pick whichever ones you like because every appraiser that goes out finds something different each visit) condition, location, upgrades or lack of, noise pollution, migratory bison, predatory lions, asteroids and close encounters of the third kind.
Either way, the deal is shot, it’s dead, no where to go now so the Realtor is left with trying to save a deal by proving to others that the appraisers were all screwed up and bank policy is fraudulent by any self respecting, self governing, litmus test. Well, this doesn’t settle well with the bankers involved because they don’t like you pointing out their problems and they go about defending their appraisers.
The best part of all this, no one ever calls the appraiser or the appraiser won’t return any one calls but the banks and, they are not calling. The banks makes the excuse that they are just too busy to follow up for accuracy on each deal and rather than fight to save the deal on the table, they move on to the next one because, THEY GOT MULTIPLE OFFERS!!!!!!!!!
Ok, so love it or hate it, the game is a foot.
FYI: this is one reason why I don't deal with Countrywide. It's scandolous.
I've had to question appraisals on more than one occasion. In most cases it was possible, after sending comps and proof of value, to modify the appraisal favorably. However, it's getting tough these days because some appraisers have been found guilty of providing fraudulent values.
Comments
Countrywide RICO Lawsuit Claims Price Gouging
Austin Kilgore | 01.14.09
Countrywide required customers to hire one of its subsidiary companies to obtain appraisals without providing the proper disclosure forms, and overcharged them for the appraisals, according to allegations in a Racketeering Influenced and Corrupt Practices Act (RICO)-based class-action lawsuit filed in U.S. District Court in Seattle this week.
The suit, filed by a group of homeowners in Washington state, alleges Countrywide forced homeowners to use its subsidiary company LandSafe to obtain appraisals without providing an affiliated business arrangement disclosure that notifies customers that Countrywide owned the appraisal company, as is required by the Real Estate Settlement Procedures Act (RESPA).
“As we investigated Countrywide for our clients, it was immediately obvious that Countrywide is a well-oiled operation,” said Steve Berman, managing partner and lead attorney at Hagens Berman Sobol Shapiro, the law firm that filed the lawsuit. “Unfortunately, the company's efficiencies are focused on soaking every penny from consumers and independent appraisers in ways we believe violate the law.”
The suit further alleges LandSafe would outsource the appraisals for as little as $140, but then charge customers like Washington residents Carol and Gregory Clark, plaintiffs in the case, as much as $410 for the service.
In 2007, The Clarks refinanced their mortgage with Countrywide, the nation's largest mortgage company, and now, a subsidiary of Bank of America. The suit represents them and seeks to represent all homeowners that purchased new or refinance mortgages through Countrywide and LandSafe.
Because of its dominance in the market and ownership of LandSafe, Countrywide, the suit claims, had excessive influence on the appraisal process that took away from the independent verification of properties' value, and that hundreds of thousands of homeowners are victims of this scheme.
The suit also said Countrywide blacklisted appraisers that refused to work for the fee schedule set by LandSafe, putting them on its “Field Review List,” a database of appraisers Countrywide refused to use unless the mortgage broker also submits a report from a second appraiser.
“When you control the entire appraisal process, including your hands around the necks of appraisers financially speaking, you have a lot of influence," Berman said.
A spokesperson for Bank of America said the company had not been served with a copy of the lawsuit, but that the company thinks the suit has no merit.
Ok, so the appraiser gets and order to go out to a home and appraise it. Well, on the paperwork he got from the bank, the borrower’s requested loan amount appears. That is why it happens that the appraiser’s appraisal numbers always match exactly the loan amount, which is obtained directly from the Purchase and Sale offer. So, I have to ask, what is the appraiser appraising?
This also happens in the reverse. When a bank has a REO, they send over the appraisal order which so happens to have the remaining balance and or lowest net amount the bank is willing to take hence, why some banks price their REO’s way under value and get multiple offers immediately.
Now that you understand that, it gets worse. So, lets say Johnny Home Buyer goes into a bank and gets a loan for $150,000.00 however, doesn’t want to spend that much so he goes and puts an offer on a REO that was priced under value at $100,000.00. He finds out that the home has multiple offers so he submits his final and best at $130,000.00, he really wants the home. He got that number from the Selling Agents comps, which showed the home was worth $140,000.00 so, even though he is paying more than list, he is still getting a deal and feels really good about his offer.
So the banks appraiser (buyer’s bank) goes out and appraises the home at $120,000 due to a variety of factors, (pick whichever ones you like because every appraiser that goes out finds something different each visit) condition, location, upgrades or lack of, noise pollution, migratory bison, predatory lions, asteroids and close encounters of the third kind.
Either way, the deal is shot, it’s dead, no where to go now so the Realtor is left with trying to save a deal by proving to others that the appraisers were all screwed up and bank policy is fraudulent by any self respecting, self governing, litmus test. Well, this doesn’t settle well with the bankers involved because they don’t like you pointing out their problems and they go about defending their appraisers.
The best part of all this, no one ever calls the appraiser or the appraiser won’t return any one calls but the banks and, they are not calling. The banks makes the excuse that they are just too busy to follow up for accuracy on each deal and rather than fight to save the deal on the table, they move on to the next one because, THEY GOT MULTIPLE OFFERS!!!!!!!!!
Ok, so love it or hate it, the game is a foot.
FYI: this is one reason why I don't deal with Countrywide. It's scandolous.