I am soooo mad!! I just opened my Equity Line statement, and found that the Mortgage Company had lowered my equity line by 65%. I have never been late, have only used it a few times, and had just paid it off. I had used it to buy a HUD home and rehab it. Financed the home and paid off the equity line. So, I called the Mortgage Company to find out what was going on? I was told that it was reduced due to the “Declining Economic Conditions”. They had a BPO done and they had devalued my home by 38%. I asked if it was a drive-by BPO. Yes, it was. The problem is you can’t see my home from the road, and they are not allowed to trespass on the property, so how did they figure out what was here. It has never been listed, as we built it ourselves. So no MLS information. The only source of information would be the assessor and the assessor hasn’t been here since the home was built.
The Mortgage Company’s formula for the amount of the revised equity line is “Current BPO Value times 80% minus the 1st Mortgage and what ever is left is my Equity Line”. If I want to appeal it, I have to hire an appraiser and submit the appraisal to them and they will look at it and decide from there. Needless to say, I am not happy. I didn’t plan on using it immediately, but that’s not the point. I disagree with drive-by BPOs. You can’t determine value if you don’t see the whole picture (the interior, the upgrades, the land, etc). It isn’t fair to hardworking people to have their property’s value reduced without a fair appraisal. If they had asked, I would have been glad to allow the agent into my house for a true BPO. It isn’t the agent’s fault. It is the mortgage company. I wasn’t asked and now would have to pay for an appraisal to “possibly” raise the limit. There is no guarantee that even with that, they would change anything.
All of us are facing this loss of value on our homes. It’s a given in these economic times. It becomes more real though, when it is your personal home. I don’t need to sell, so the impact on me is minimal, other than it raised my blood pressure. But for those people who must sell their homes in this market, they are facing this very hard reality. It leaves them angry, in denial, and sometimes difficult to deal with. We have a very fine line that we are treading. Getting the job done (selling the home, even at a loss) and making it as easy as possible on our sellers (especially when they are losing money). The days ahead will be challenging, but we are up to the challenge.
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