WT&^%$ Has Happened to Home Appraisals?


May 2012

Recently, I applied for a new, lower-rate mortgage. My credit rating is perfect and is quoted as 801 (average) by the three financial rating companies. I am a fiscal conservative and my record shows it. I have owned homes since 1977 and have never been late with a mortgage payment, let alone missed one. I have a guaranteed monthly income plus an investment portfolio.

In March I applied for a new mortgage to drop my interest rate from 4.8 to 3.8. The contractor who had rebuilt my home to new standards in 2006 unofficially appraised my home's current 2012 value at $385K. The finance company’s appraiser -- about whom I know nothing -- valued my house at $265K. He disregarded the complete update of my property as he did the expensive landscaping we had done as well. My refi application was denied. My $450 appraisal fee was gone.

Something is rotten here. In talking to other people I am finding this an ever more common occurrence. This situation makes no objective sense. Is this simply a scam to steal appraisal fees? Are banks and refi organizations somehow being rewarded for turning-down mortgage applications? Who might benefit for stopping the home finance industry? In an election year, I have little doubt that the blame will be placed somewhere, whether justified or not.

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