@Anonymous wrote:
I hope someone can shine some light on this situation for me. We are in the final straights of closing on a short sale property with an FHA 203k streamline loan. The lender gave us a million conditions, none of which was significant (except paying off some small collections, all done) and we completed them all. Our appraisal was done 4 weeks ago and came in at 230K, the loan amount would be for 228K so we were ok. Last week they gave us their "final conditions" which were basically getting some papers signed by the contractor. No problem, done. Yesterday, my broker calls and says that they did some kind of desktop valuation that came in at 159K ??????? That's outrageous. So the lender told him they now want a SECOND appraisal?
1) The main issue with this is that we are under a deadline. We have received two extensions from the seller's bank and now I'm told, there is no way we can close by the 16th. I don't believe the seller's bank will give us a third extension...although we are going to ask anyway. 2) The second issue is, who pays for this appraisal? I already paid for one, I don't think its fair to pay for another just because their desktop program says something outrageous? How can I even know that they entered proper info into that valuation program? 3) Do they have any right at this late stage to do this? I'm wondering if its even allowed with FHA to just ignore an appraisal for no apparent reason. I'm also scared about what happens if the next appraisal comes in at say 220K? The seller's aren't going to care since one appraisal was already in line. They are not going to lower the price for a second appraisal they didn't even want. Our contract only talks about one appraisal.
Anyone have any ideas? Thanks, Jenny
I would try getting answers to these questions from your loan officer and your realtor.
My husband is an appraiser, and he often does review appraisals after the fact...like 2 years down the line when the property has gone through foreclosure. He can often easily document that the appraisal was too high, even during the bubble economy.
He recently had an experience which was opposite from yours. He did an appraisal that the mortgage broker and seller decided was too low, so they appraisal shopped and found someone who would put a seal of approval on the deal. They ordered and got a higher appraisal.
I would urge that you try to look at the bigger picture here. Maybe this appriasal was too high. Without knowing the details, that's not something that can be known. This new appraisal could mean protection for you and keep you from overpaying. You mention that this is a short sale. Was there competition for this property when you bought it? How long had it been listed? Short sales don't always mean value. They mean that the former owner paid a certain amount (that may or may not have been fair at the time), and now values in the area have dropped. Too many people think that buying in a short sale situation means they got a deal. It doesn't.
