Q&A: Refinancing mortgage, low ball appraisal. Do I have to pay?

Question by MSV: Refinancing mortgage, low ball appraisal. Do I have to pay?
Recently I am refinancing my mortgage, so that I can get cash back to buy a condo overseas. I decided to refinance, the loan officer promise me this and that, the whole bait and switch (Congress needs to make this illegal), I was kind of gullible to believe him, so I sign a form to go ahead and look up my credit. I DID NOT sign though any paper stating I had to pay for the appraisal though. He even said there are no upfront fees. He sends out his appraiser and they appraised my home… get this… the same amount it was appraised for 10 years ago when i got my first mortgage! Even though I had added close to 2000 sq. ft of additions to my home since and back then I didn’t even have a paved driveway! I had an appraisal done to my home a few years back by a local appraiser and comparing that one to the one the mortgage company recently did… they are off by more than 80,000 dollars and that didn’t include the new addition we did in 2007. Do I have to pay when it obviously lowballed?
Oh forgot to mention… I obviously declined the offer, I just want to know what I am liable to pay for, considering I should be the one being paid for wasting my time with them and getting zero results.
To Jimdotedu: All additions are paid in full. I did not take any loan to do them. I bought the materials and my sons and I did all the work (Licensed General Contractor). Everything is completed and inspections passed. Though, when the appraiser came the most recent addition we did not open up the addition to the rest of the house (the entrance to the new addition was thru the existing rear door). I didn’t take it down yet, since my wife did not know what she wanted to do with the room yet.

I reread it and I cannot find anything on there that tells me I have to pay for an appraisal. My present mortgage company , I know they gave me a form stating that appraisal cost this amount and that it was an upfront fee and I remember paying that with a check before an appraisal was authorized. This lender said no upfront fees and only agreement I signed was authorization to release information (tax records, etc)
To mykidsmom: I don’t like to call out the business’ name since I didn’t want my question straying into a review of the company. I wanted to refinance to get cash back to buy a condo in The Philippines, since it is legal (US and in The Philippines) for me to own a condo there even though I am a US citizen. I don’t see any scam in doing such a thing, considering it is refinance for cash back and my house is the collateral. If I don’t pay, they foreclose on my house, simple as that.

Also i reread over and over the agreement I signed… only agreement I signed was an agree for authorization to release information. Also the lender specifically told me no upfront fees, I have it on email, since he told me on the phone but I asked him again on email so I have it on record.

Also, this is my son’s account… I asked him to type my question for me, but all I got was “blah blah im tired blah blah” , so i told him i will type it just sign on, since I do not have an account here.

Best answer:

Answer by rhsaunders
Probably. Negotiate with the bank to find another mutually agreeable appraiser. Also, check out zillow.com’s evaluation. Remember that real estate values have declined recently in many parts of the country.

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6 Responses to Q&A: Refinancing mortgage, low ball appraisal. Do I have to pay?

  1. jimdotedu says:

    Couple of questions first

    1) are the new additions paid for? If not these don’t count toward the appraisal

    2) Are you SURE that someplace in the fine print (get your magnifier) you didn’t agree to pay for appraisal?

    Having said that, you still might save some money. Go to http://www.zillow.com and look up your tax appraisal. If it’s significantly more than the bank appraisal, you can challenge the tax appraisal come grievance day. You can use the bank appraisal against the assessor, and the assessor’s appraisal against the bank.

  2. Marwan H says:

    It looks like a bad deal to me.
    Find another Bank for better deals, shop around.
    Good luck.

  3. mykidsmom says:

    o-o-o-o-o, I guarantee you, somewhere in all that paperwork you signed a piece of paper that grants you the honor of paying for that appraisal. But believe me that bank wants to lock you into paying for the next umpteen hundred years–well at least the next 30 years–whatever amount you and him were talking about. When the loan officer talked to the appraiser, he told him the loan amount you two were looking at and that he really hoped the property was worth that much (wink, wink). I know, I used to do real estate appraisals & there are a couple of bankers out there that aren’t too happy with me because I wouldn’t be their good old buddy and bring in their appraisal where they wanted it–but then it was my name that was on the signature line and my butt that would be in the witness chair if I got sued and hauled into court to substantiate my figures. So if you believe that you were ripped off, hire another appraiser not associated with the bank and get an unbiased appraisal–and I’m not talking about an opinion from a real estate agent, they are NOT REAL ESTATE APPRAISERS–when are y’all ever going to understand that!! Just had to stick in that rant because some folks believe real estate agents know the absolute value of a property–ball park, yes; but you can’t take it to the bank.

    Manuel, You sound like a nice guy. Go into the bank–I’m re-reading your post and notice you never mentioned what type of financial institution you visited, ask to see the document that committed you to payment of the appraiser &, um-m-m-m hey–something doesn’t sound right—condo overseas–good scam, Bravo, well done, can’t wait until school starts next week so you college kids will find better things to do with your time.

  4. valstpatrick says:

    Technically, you are NOT obligated to pay for the appraisal – the bank/lender is.

    The bank can not come back to you after the fact and say oh we didn’t make any money on you because you didn’t do a loan with us so here is the bill. The bank ordered the appraisal – it was prepared for the lender – the bill belongs to THEM.

    As a side note about the appraisal’s value. Check page 2 – for the sq footage – if the appraiser pulled up tax records and the tax records do NOT have the additional square footage – that could explain the HUGE difference in values used. he used smaller comparable homes. just a thought….

    If you are serious to try a refinance, call up the appraiser you used in the past and see if he will do a ‘quick look up’ for value on your home. See what he comes back with – again his verbal value is not an appraisal but if he is local and knows your home, it may be a more accurate value.

    Hope this helps,

  5. matzael says:

    No you don’t have to pay for the appraisal. The company that ordered it does. I’d read a copy of the appraisal and see if you can figure out why he came back with such a low value. (i.e. not using the recently added square footage, using foreclosed homes as comparable sales etc..)

  6. NY PTK says:

    You can walk…The Loan Officer will have to eat the appraisal fee out of pocket. That appraiser sounds sketchy. Go to another bank for the money you need. Explain what happened, but not through who and tell them you expect a true and fair appraisal. If you are not satisfied with the second set of results (by a different company) you may even consider getting one by yourself, if you can afford it. I see many people just walk away and stick the appraisal fees. Sucks for those people, but they learn and move on.

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