Good morning, We received the above complaint and at this time, do not see a substantiation for the claim. I have addressed the concerns below. A report can be "subject to" or "as is". A subject to report requires the appraiser to go back out to the property because she has...
called for repairs. In this case, the appraiser did not write the report "subject to" but "as is" and placed a comment asking for an expert to inspect and make recommendations to ensure safety and remedy if needed. Please see following verbiage in report as well as photo. "The subject appears to have been well maintained with no deferred maintenance noted at the time of inspection. The rear vinylalong the chimney is damaged from the heat of the fireplace in a small section. An inspection by a fireplace and chimneyexpert is necessary to determine the exact cause and possible remedy of this issue for the safety of the occupants." What this means is that the appraiser would not be required to go back out there for $125 additional report (since the report was as is) unless the chimney inspector called for repairs for the remedy. The appraiser only required an expert to come inspect. I cannot speak to who required the siding to be replaced as the only requirement from the appraiser was that a professional inspect due to the warping. The appraiser is REQUIRED to point out anything that MAY be a safety issue and have an expert assess if it is an area where there are experts to review. Again, I or the appraiser cannot speak to why the siding was required to be replaced. Since the siding was replaced, the lender asked the appraiser to go back out and confirm that it was replaced as this appeared to be the remedy asked for and given by the inspector, resulting in the additional $125 report. To address the value, the appraiser is required to use the best comparable sales he/she has. The value reconsideration that is referenced in the complaint is the compliant solution to any concerns a borrower has with the value. It is important to understand that in this business, just because a value comes in lower than the borrower believes it should be, does not make it a low quality report. We understand a home may have a lot more money placed into it and could even be sold for more than the appraisal can support in value but the purpose of a lending appraisal is to show what the current market supports in value. The value reconsideration does not cost the borrower anything and we would highly recommend the borrower following this route if they believe there are more similar homes that have sold recently to support a higher value. We absolutely would have the appraiser review them and either change the report if it was a human error or advise why they could not be used in the report over the current comparable sales used.
[To assist us in bringing this matter to a close, you must give us a reason why you are rejecting the response. If no reason is received your complaint will be closed as Assumed Answered]
Complaint: [redacted]
I am rejecting this response because:the 4th bedroom in question does have a closet...if the appraiser had taken the time to step into the room ....perhaps this appraisal would have ended differently...I still feel the appraisal was inaccurate...and want a full refund for an incorrect appraisal...
Regards,
[redacted]
Good afternoon! Regarding [redacted]’s complaint: An appraisal is an opinion of value put together by an appraiser who is using a sales comparison approach to determine a value for the property. This value is not derived from the amount of money the home was purchased for +...
amount of money put into the home. In a lending environment, underwriting requires the value to be supported by the market. In a stable market, sales comparables can be used for the past 12 months if inventory (similar sales) are low. The appraiser did not fall outside of these guidelines. The attached value reconsideration includes Ms. [redacted]’s concerns. The appraisal is completed assuming most similar and best sales have been used to derive value. Although a home owner may feel their home is worth more, there has to be similar sales in the market area to support that value. The appraiser has stated all comparable sales used were the most similar and best representation of the market. If a homeowner is able to provide sales they feel are more similar, (in the value reconsideration form) the appraiser will research these sales and advise why they were not used or if a mistake did take place, use the sale. Unfortunately, Ms. [redacted] was unable to provide any sales she felt better represented the subject property, only some items she felt were misrepresented in the appraisal. I have included items below that show her concerns were already taken into account in the appraisal and she had several follow up conversations with myself as well as [redacted], an in house appraiser, explaining how a value is determined. I understand that it would be frustrating to hear that the market isn’t currently supporting the amount of money that has been invested in your home, however for lending institutions [redacted] is very clear about what can be used to determine value. If a real estate appraisal was done shortly after the Valutrust appraisal that resulted in $483,000 by sales comparisson approach, that would have been a perfect opportunity to provide the sales used in that appraisal for the value reconsideration to the Valutrust appraisal. As you can see by the attached document, no sales were provided. In the screen shot below, you will see the borrowers RV port/shop/garage has been accounted for in the grid under outbuildings. There is an across the board adjustment (which some underwriting will approve and some will not) stating that although there is nothing similar in the market to show that this would add value, the appraiser felt strongly that it could not go without giving any value. All other sales comparables were adjusted by 20,000, which means it gave the subject a 20,000 value for it but an across the board adjustment. Going above 20,000 in an across the board adjustment would most likely result in the immediate flagging to underwriting that the market could not support such value and deny the loan.In the below screen shots you will see 2 screen shots that address the discrepancy regarding bedroom count. In 2008, Fannie Mae started to standardize the process of appraisals and now has guidelines that determine certain fields on an appraisal report. The 4th bedroom that the borrower is referencing is notated as a room in the total room count and included in the Gross Living Area. It is not included as a bedroom as it does not have a closet, he labeled it a den. But as you can see with the explanation of adjustments, the appraiser reports that the market does not react differently to a 3 bedroom vs 4 bedroom and so does not adjust for this. The subject was not lowered in value in any way as the 4th room was still accounted for in square footage. Bathroom count is adjusted for as you can see by commentary and the grid but no reaction to 3 bed vs 4 bed. Again, unless the market shows a reaction to support improvements made, they don’t all result in an increase in value. They may be influential in the condition of the home (added landscaping, skylights, ect can result in a better condition) so although this can’t be seen on a grid, there is commentary advising many items have been improved and the home has been very well maintained and items updated resulting in a great C3 condition rating. Valutrust continued to follow up with Ms.[redacted] regarding her concerns and tried to explain them the best we could. Although I empathize with the frustration of a report coming in with a lower than expected value, lenders use an appraisal as confirmation of collateral which makes it very important that the MARKET is supporting that value. Valutrust and the appraiser have done everything on this appraisal order in compliance and regret that the borrower feels screwed by the appraisal process. [redacted]Director of Client Services
Good morning, We received the above complaint and at this time, do not see a substantiation for the claim. I have addressed the concerns below. A report can be "subject to" or "as is". A subject to report requires the appraiser to go back out to the property because she has...
called for repairs. In this case, the appraiser did not write the report "subject to" but "as is" and placed a comment asking for an expert to inspect and make recommendations to ensure safety and remedy if needed. Please see following verbiage in report as well as photo. "The subject appears to have been well maintained with no deferred maintenance noted at the time of inspection. The rear vinylalong the chimney is damaged from the heat of the fireplace in a small section. An inspection by a fireplace and chimneyexpert is necessary to determine the exact cause and possible remedy of this issue for the safety of the occupants." What this means is that the appraiser would not be required to go back out there for $125 additional report (since the report was as is) unless the chimney inspector called for repairs for the remedy. The appraiser only required an expert to come inspect. I cannot speak to who required the siding to be replaced as the only requirement from the appraiser was that a professional inspect due to the warping. The appraiser is REQUIRED to point out anything that MAY be a safety issue and have an expert assess if it is an area where there are experts to review. Again, I or the appraiser cannot speak to why the siding was required to be replaced. Since the siding was replaced, the lender asked the appraiser to go back out and confirm that it was replaced as this appeared to be the remedy asked for and given by the inspector, resulting in the additional $125 report. To address the value, the appraiser is required to use the best comparable sales he/she has. The value reconsideration that is referenced in the complaint is the compliant solution to any concerns a borrower has with the value. It is important to understand that in this business, just because a value comes in lower than the borrower believes it should be, does not make it a low quality report. We understand a home may have a lot more money placed into it and could even be sold for more than the appraisal can support in value but the purpose of a lending appraisal is to show what the current market supports in value. The value reconsideration does not cost the borrower anything and we would highly recommend the borrower following this route if they believe there are more similar homes that have sold recently to support a higher value. We absolutely would have the appraiser review them and either change the report if it was a human error or advise why they could not be used in the report over the current comparable sales used.
[To assist us in bringing this matter to a close, you must give us a reason why you are rejecting the response. If no reason is received your complaint will be closed as Assumed Answered]
Complaint: [redacted]
I am rejecting this response because:the 4th bedroom in question does have a closet...if the appraiser had taken the time to step into the room ....perhaps this appraisal would have ended differently...I still feel the appraisal was inaccurate...and want a full refund for an incorrect appraisal...
Regards,
[redacted]
Good afternoon! Regarding [redacted]’s complaint: An appraisal is an opinion of value put together by an appraiser who is using a sales comparison approach to determine a value for the property. This value is not derived from the amount of money the home was purchased for +...
amount of money put into the home. In a lending environment, underwriting requires the value to be supported by the market. In a stable market, sales comparables can be used for the past 12 months if inventory (similar sales) are low. The appraiser did not fall outside of these guidelines. The attached value reconsideration includes Ms. [redacted]’s concerns. The appraisal is completed assuming most similar and best sales have been used to derive value. Although a home owner may feel their home is worth more, there has to be similar sales in the market area to support that value. The appraiser has stated all comparable sales used were the most similar and best representation of the market. If a homeowner is able to provide sales they feel are more similar, (in the value reconsideration form) the appraiser will research these sales and advise why they were not used or if a mistake did take place, use the sale. Unfortunately, Ms. [redacted] was unable to provide any sales she felt better represented the subject property, only some items she felt were misrepresented in the appraisal. I have included items below that show her concerns were already taken into account in the appraisal and she had several follow up conversations with myself as well as [redacted], an in house appraiser, explaining how a value is determined. I understand that it would be frustrating to hear that the market isn’t currently supporting the amount of money that has been invested in your home, however for lending institutions [redacted] is very clear about what can be used to determine value. If a real estate appraisal was done shortly after the Valutrust appraisal that resulted in $483,000 by sales comparisson approach, that would have been a perfect opportunity to provide the sales used in that appraisal for the value reconsideration to the Valutrust appraisal. As you can see by the attached document, no sales were provided. In the screen shot below, you will see the borrowers RV port/shop/garage has been accounted for in the grid under outbuildings. There is an across the board adjustment (which some underwriting will approve and some will not) stating that although there is nothing similar in the market to show that this would add value, the appraiser felt strongly that it could not go without giving any value. All other sales comparables were adjusted by 20,000, which means it gave the subject a 20,000 value for it but an across the board adjustment. Going above 20,000 in an across the board adjustment would most likely result in the immediate flagging to underwriting that the market could not support such value and deny the loan.In the below screen shots you will see 2 screen shots that address the discrepancy regarding bedroom count. In 2008, Fannie Mae started to standardize the process of appraisals and now has guidelines that determine certain fields on an appraisal report. The 4th bedroom that the borrower is referencing is notated as a room in the total room count and included in the Gross Living Area. It is not included as a bedroom as it does not have a closet, he labeled it a den. But as you can see with the explanation of adjustments, the appraiser reports that the market does not react differently to a 3 bedroom vs 4 bedroom and so does not adjust for this. The subject was not lowered in value in any way as the 4th room was still accounted for in square footage. Bathroom count is adjusted for as you can see by commentary and the grid but no reaction to 3 bed vs 4 bed. Again, unless the market shows a reaction to support improvements made, they don’t all result in an increase in value. They may be influential in the condition of the home (added landscaping, skylights, ect can result in a better condition) so although this can’t be seen on a grid, there is commentary advising many items have been improved and the home has been very well maintained and items updated resulting in a great C3 condition rating. Valutrust continued to follow up with Ms.[redacted] regarding her concerns and tried to explain them the best we could. Although I empathize with the frustration of a report coming in with a lower than expected value, lenders use an appraisal as confirmation of collateral which makes it very important that the MARKET is supporting that value. Valutrust and the appraiser have done everything on this appraisal order in compliance and regret that the borrower feels screwed by the appraisal process. [redacted]Director of Client Services