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New Appraisal Rules Lead to Low Ball Estimates
I had written a blog some time back about the value of a house with foreclosures making up the comps.
  'What's my House Worth When there's a Foreclosure 2 Houses Over 
This got little attention within the AR community and only slightly more on my personal blog. What seemed to hit home stronger was the impact of the HVCC fiasco and the relevance that foreclosures are making with appraisals.
The article I had read was written by Kenneth Harney. Within the article he offers up several examples of a system starting to be get hit by the new regulations. One of his examples was of a San Diego developer that was trying to close out the final houses in a 120 unit sub-division. Originally the homes were offered in the $350,000 to $360,000 range. The latest appraisers coming out by the banks were coming in with valuations $60,000 or more below the selling prices. The appraisers who are unfamiliar with local market trends are using distressed sales (foreclosures and short sales of existing homes) as their 'comparables'. Many of the comps were in poor condition and all of them offered fewer amenities.
Another example was of a loan applicant in Wilmington, ... more

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