I'm having some trouble with this one, and wondering if this request for a THIRD appraisal may be illegal.  

Scenario.  I represent the Seller, who I sold this REO property to a few months back, as an investment property.  Client is a full-time contractor/investor who likes to by, bust his tail and checkbook for a few weeks and does a masterful job at turning a sow's ear into a silk purse. 

The house sold in two days from the date of listing.  It sold for more than 100% over the most recent purchase price (what my client paid). 

So, we have two FHA issues:

!) Seasoning - the offer and closing cannot occur prior to 91 days from the last transfer date. 

2) The purchase price requires to appraisals, because it's less than 180 days since the purchase and the sale price exceeds 100% increase in value.

Today, the lender notified the Buyer's agent that the property would be subjected to another appraisal, #3.  

Here are my problems with this:

First off, right away, I told the Buyer's agent that though my seller had agreed to pay up to $4,000 for the Buyer's CC's, this is not a usual and customary fee, and they should expect that someone else will need to pick up the tab on this $350 charge because it won't be my seller.

Second, they expect an extention of another day, without any compensation.

But third, and this is the part that I'm most concerned about -- this request for another appraisal; it's not required, supposedly, by FHA, so why is this transaction being singled out for discrimination, or at least exceptional scrutiny?   What are they going to do, keep sending out appraisers until they get one that gives them the number they want to hear?  

Has anyone had this experience lately?   I did get the Buyer's LO to agree to foot the bill for the 3rd appraisal, but I'm curious to see if anyone else has run into this lately.  Seems like it could be illegal, unless it's uniformly applied to ALL loan applications with purchases that meet this unique scenario.   

 

 

 
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2 Comments on Mortgage Loan U/W requests THIRD appraisal for New FHA Loan - is this legal?

SEP
09
2009
238,128 Points 6 Featured Posts Called Shot Master

Andrew: Sorry to read you're having trouble there. Hopefully you got that one closed. My best to your at your new venue.

11:20pm • #1
SEP
10
2009
2 Featured Posts

Hello Matt,

Yes, the loan did close yet the closing date had to be rescheduled three times.   We had a good Buyer's agent who, unfortunately, could not pick his lender.  (I've never had a Lender be so rude to me on the phone, yet I think he feels the same way!  :^) 

Of course, all is well that ends well, yet I really wonder about this potentially discriminatory practice of insisting on three appraisals.  Were they going to keep digging until they got a lowball appraisal, then say, "Ah ha!  My suspicions were right!".  Fortunately, the third appraisal came in thousands above the Offer price so, they finally gave up the hunt.  

We REALTORS need to explain to Lenders that, while we may not have much that is sacred in our industry, the closing date is the closest thing to sacred that we have.   They missed it three times and we were very close to walking away from the deal.   

As for the new venue, it's a good fit for the investor/REALTOR(tm) in me.   Same balloon, different landing pad.   I'm working so many short sale files now that I'm having to develop new systems to keep track of stuff.  Very exciting and I'm able to be of help to folks in trouble, so this is good. 

All my business and personal best!        

4:54pm • #2


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Andrew Lietzow, MBA-Exec Dir

Iowa Real Estate Investors Association

Des Moines, IA

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Address: 4023 Urbandale Ave Unit 13246, Des Moines, IA, 50310-0246

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