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A Tale of Two Appraisals

By
Mortgage and Lending with Jay Epstein State Farm Insurance

Once upon a time there were two borrowers whose loans were set to close within a week of each other. 

Borrower number one was fortunate that his Loan Officer worked with a wonderful appraiser named Mark.  Now Mark was the ideal appraiser - conservative, but not too conservative.  He used only solid comps and always made reasonable adjustments.  When the Loan Officer submitted a loan with Mark's appraisal, she never had to worry about value.  Appraisal Review?  Bring it on.

Borrower number two, on the other hand, went to our LO mid-way through his transaction with an appraisal he had already paid for by a wicked appraiser we'll call Ron.  Since the borrower had already paid for the appraisal, our heroine agreed to at least begin work with the existing appraisal.  Upon review, she was crushed to realize that there was going to be a problem.  Every one of Ron's comps crossed a major boundary!   We're talking MAJOR boundary - as in the 163, 15 and 8 freeways.  The poor Loan Officer couldn't even quote a rate to this client so sure was she that a review and value cut lay lurking in the shadows at the lender's corporate office.

Now for the Dicksonian Twist: 

Our heroine sent both loans to the same lender - actually apologizing to her Rep for the shoddy appraisal that was sure to be a problem and not wanting her good reputation to be tarnished.  But alas!  True Blue Mark's appraisal was cut by more than 20% and Bad Boy Ron's break-every-major-boundary-rule appraised value held.

The End 

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Epilogue: Always true to her word and able to take value cuts in a single bound (thanks to a short period of really awesome rates, dude), our heroine was able to change lenders (and the new lender did not even review the good and solid appraisal) and grab a better rate for borrower number one at the same time!   So, all the borrowers lived happily ever after, after all.

Show All Comments Sort:
Max de Vries
Intero Real Estate Services - Livermore, CA
I believe you. it is amazing what the underwriters are looking at today.
Dec 11, 2007 03:10 PM
Max de Vries
Intero Real Estate Services - Livermore, CA
I believe you. it is amazing what the underwriters are looking at today.
Dec 11, 2007 03:10 PM
Thomas Benya
Century 21 New Millennium - La Plata, MD
I've seen some shoddy appraisals recently myself, with all the mortgage fraud going on you think they'd be more careful with their numbers!
Dec 11, 2007 03:47 PM
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes
Interesting. You never know what will happen. Thanks for sharing. All the best.
Dec 11, 2007 03:54 PM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI
I love tales with happy endings!
Dec 11, 2007 04:47 PM
Dale Campbell
Virginia Real Estate - Mechanicsville, VA
Thanks for sharing!  I love the twist you put on it.  It is crazy what will be accepted and what will not.
Dec 12, 2007 01:56 AM
Ronald Miller
Monarch Mortgage - Fredericksburg, VA

Hey Lisa,

Great story and with a happy ending to boot. I can not believe the underwriter thought process on the two files? Maybe the underwriter had done a review on a questionable appraisal from Mark in the past...who knows; I am however glad it all worked out in the end. 

Dec 12, 2007 02:57 AM
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ
AzLadyInRed

So? Are you saying that in this market both worked? What a cute way to share a story. I'm just one of those dense ones that doesn't get it. In the OLD days (2004-2006), yes, I believe completely this happened. Can't imagine it happening today?

Dec 12, 2007 02:59 AM
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS
Fortunate for both buyers that it worked out.  Some of the appraisers in our area are really becoming tight with the numbers.
Dec 12, 2007 10:42 AM
Lisa Epstein
Jay Epstein State Farm Insurance - Ukiah, CA
I guess it illustrates that in this market, anything can happen and we need to always have plan B and C in our pocket if plan A doesn't work out! :)
Dec 12, 2007 11:43 AM