Sunday, April 22, 2012

What does an underwriter, appraiser, and a hemorrhoid have in common?

They're all pains in the arse.

So, within hours of my last post complaining about the appraisal not being in yet, I get an email and phone call from the loan officer at 8:30 pm.  The appraisal was in and was...tens of thousands of dollars too low.  Commence total breakdown.  I was ugly-crying.  He emailed me a copy of the appraisal.  After a huge freakout and some deep breaths, we reviewed the report.  There were multiple obvious flaws.  The comps were from the other side of town in a crappy older neighborhood.  It said the market doesn't support new construction in the last 5 years, which is funny because our neighborhood is all new and started 6 years ago and houses are continuing to be built there.  There are also 2 other neighborhoods in our small town that are new construction and are growing.  Therefore he didn't use the cost approach for new construction, he used the sales approach, which drives the value down because it doesn't treat the new home and land as separate values, among other things.  There were multiple other issues with the report too.  Our loan officer (who has been awesome BTW), Wayne Homes, another bank, and our selling realtor (who owns his own brokerage and is awesome) all agreed the appraisal was not done correctly.  Also, a coworker is building a Montgomery in the same town (dig date this week) and his appraised just fine.

My husband called the Department of Housing and Urban Development (HUD) since it was FHA to ask what our options are.  They said we could appeal the appraisal and were very clear that both the appraiser and the underwriter share equal responsibility to ensure the appraisal is accurate.  Dana at WH gathered some facts and comps and sent them to the loan officer who then went to the underwriter requesting another appraisal.  The underwriter didn't even give it a second look.  She just said that they have to trust the appraiser because he's the expert.  How can someone who lives 30 miles away be an expert in our town?  How can someone with so many obvious flaws in their work be an expert?  So the UW completely bucked her responsibility to ensure the appraisal was accurate and to provide acceptable customer service.

Once the appeal was denied, we weren't playing around anymore.  We went straight to the top to get our issue solved and our dissatisfaction with the underwriter heard.  My husband emailed the Sr. VP of Lending at the corporate office telling our tale.  Within hours, he had a phone call from a Regional Planning Manager (?).  We were told they had begun looking into the situation, including involving the head of underwriting.  The next day they told us they would have the appraisal reassessed.  We're not optimistic, but at least they're doing something (or pretending to).

In the meantime, Dana set us up with a second bank so we can get the ball rolling with them on a 5% conventional loan.  She also mocked up a quote for the Montgomery with all our same options and upgrades as the Litchfield just in case we may need to change the floorplan. 

So for now we're in a holding pattern until we we get a loan closing date (probably with the new bank). We knew things were going too smoothly...

Oh, and my advice is to never deal with banks that rhyme with Puntington.  This is the second time we've used them and the second time there have been major issues.

1 comment:

  1. This is so lousy! Hang in there. It sounds like getting past the loan crap is the biggest hurdle with building from all the stories I've read. Soon this will be a distant memory! :)