Red_as_copper, Home Buyer in Butte, MT

When does FHA require a home to be reappraised? Bank just called to say I need another apprasial even though I paid for one less than 30 days ago.

Asked by Red_as_copper, Butte, MT Mon Dec 27, 2010

I've been under contract since Sept. 1 on a house which was part of an estate. It was transferred into the name of the exeutrix some months ago. I paid $550 for an appraisal on Nov. 8, at which time the executrix was the owner in public record. The bank just called today - we are now supposed to close by Dec. 31 - to say I need to pay for another appraisal because the property title had been transferred. They said it is FHA's rule. They said it is not that my appraisal was bad (they chose the appraiser and ordered the appraisal) but that FHA just requires this. I'm out of money, time, and patience. This is an FHA 203k Streamline and I've already had to fix some things that came up on the other apppraisal out of my own pocket. The seller had to put in a whole new septic system at a cost of over $7k. If I back out now, will I have to pay origination fees listed on my good faith estimate? Can they make me pay for another appraisal?

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9
Red_as_copper, Home Buyer, Butte, MT
Tue Dec 28, 2010
After speaking with the lender again today, they are sticking by their guns and telling me it is an FHA requirement. He even went so far as to tell me the FHA underwriter didn't understand the guidelines, and that his underwriters are correct. He has stated he is "busy looking for a loop hole" and even though my locked-in interest rate of 4.25% expired today he is doing me a "big favor" by extending it another 15 days at a cost to the lender of $675. What a guy huh?!? It would never have expired if not due to his "ineptitude" as Mr. McDowell said in his post. I agree that there is some underlying issue with the appraised value of the house. So basically he was not expecting me to take the initiative to contact FHA and call him out on this nonsensical reasoning. Rudy hit the nail right on the head. My agent is about to blow her top, and the seller's agent has gone postal on this lender. Her client is nearly in a foreclosure situation because this has gone on so long. Thanks to everyone for your feedback, help, and suggestions. I will keep you posted. I hope none of you ever has to deal with something like this, ever.
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Dec 28, 2010
I would want to speak with professional in charge there could be some error made. OR trying to collect etc money.

If the title changed that would not warrant a full appraisal , few updates in their info. considering property values not changed, OR sq. ft. and etc etc.

GREAT QUESTION : keep us updated

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
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0 votes
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Tue Dec 28, 2010
Hi, Red_as_copper

You should be red as copper given the ineptitude by which your loan is being handled. FHA rep is correct, if lender is requiring another appraisal, then its up to them to pay for it, not you. However, typically this is only done when underwriting is questioning the value the appraiser came up with. Perhaps that is the real issue after all. Again, the other reason you were given doesn't make a bit of sense. And if it was an issue, it could have been simply and easily corrected with a just a phone call from your lender's appraisal dept to the appraiser. And done for free!
0 votes
Manu Kapoor, Agent, New York, NY
Mon Dec 27, 2010
This depends upon the FHA lending instituation.
If they request it, they are the BOSS. You cant question your banker.
0 votes
Carl Henker, , 95928
Mon Dec 27, 2010
If you changed lenders you may only have to pay for a credit report to the current lender as you have already paid for the appraisal. All other cost would only be due if you closed with that lender, origination, processing etc. This loan should have been closed a long time ago September to December and soon to be January. Even if you don't change lenders you will need to extend the contract again. Find another lender that understands FHA guidelines extend the contract and get your loan closed. Ask the local title company which lender has closed the most FHA purchase loans this year and go with that lender as the leader they will know what they are doing.
0 votes
Red_as_copper, Home Buyer, Butte, MT
Mon Dec 27, 2010
If I went to another lender, does anyone know if I would be required to be origination fees with the original lender? They basically told me there are "certain costs" associated with this type of loan and I would be obligated to pay them whether I close the loan with them or not.

The appraisal was done in my name, and paid for by me, but ordered by the lender. The property owner of public record is the executor who inherited the property from the decedant. So it appears the appraisal is correct. I would never recommend this type of loan or this lender to anyone again. We were supposed to close Sept. 30 and it has been extended out 5 times because of our financing and the hoops the lender is making us jump through. The seller, having inherited this property, is now in HUD hardship status because she could not carry the mortgage and utilities this long. It has been very bad.

BTW, I took Fred's advice and contacted FHA this morning. I was told that this house would not be considered a "flip" but is exempted from those guidelines because it is an inheritance. Either way, the FHA underwriter said the cost of a 2nd appraisal is not allowed to be passed on to the borrower. She recommended I tell my lender that their underwriter needs to call an FHA underwriter and get a clue.
0 votes
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Mon Dec 27, 2010
Red_as_copper

This is not an FHA requiremenrt. If title changed hands, all the appraisers has to do is update the appriasal accordingly. Another appraisal should not be required, and the expense (if any) to make this simple change should not be charged to you. If it is, again, the cost should not be anywhere near what the appraisal cost. I believe there is another issue here. If you can't get a straight answer, you may want to take your business elsewhere. If you do, your FHA case# and present appraisal must be transferred to new lender within 48 hrs and w/o any costs to you. Hope this helps and good look.
0 votes
Carl Henker, , 95928
Mon Dec 27, 2010
An FHA203K streamline is not used for a purchase? It sounds like you have an inexperienced FHA lender that is considering the property transfer a Filp transaction less than 90 days. If the appraisal was done in the name of the deceased owner and the estate transferred the property to the executrix then all that should be needed is an amended appraisal to correct the name. The owner of record must appear on the appraisal.
0 votes
Fred Glick, Agent, Mountain View, CA
Mon Dec 27, 2010
I would go postal on these idiots.

What does a change in title have to do with the value of a property?

I would call the local FHA office and your Congressperson's office and tell them the problem. Make sure they understand that this is a national problem.

It's stupid, obnoxious, overbearing, ridiculous and downright silly. Also, if they want a new appraisal, let them pay for it. It's not your fault.

Good luck,

Fred
Web Reference:  http://fglick.com
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