Get a Copy of Your Home's Appraisal by Holden Lewis
Scripps Howard News Service
You are entitled to a copy of your property appraisal if you pay for it.
Sounds obvious, but the mortgage business contains a lot of murky areas, including policies about appraisals. Homeowners get frustrated when they get stuck between an uncooperative appraiser and a hard-bargaining mortgage broker.
Take the example of Rob MacGregor, a novelist in Wellington, Fla., who decided in October to refinance his mortgage. He searched online and selected a mortgage broker in Southern California.
"He immediately said, 'I can have somebody come out and do an appraisal of your house, and this is the one thing you'll have to pay for--$300,'" MacGregor says. The broker said the appraisal could be used elsewhere if MacGregor decided to go with another lender, "and that sounded fair to me," MacGregor says.
Lenders require appraisals to ensure that the property is worth at least the amount of the loan. Brokers get one or two copies of an appraisal that includes color photos, a description of the property, and a list of prices paid recently for nearby, comparable houses.
MacGregor's broker selected an appraiser and MacGregor gave the appraiser a $300 check. After the appraiser left, MacGregor called and asked for a receipt and a copy of the comparisons with neighborhood properties. The receipt arrived, but no comparables.
MacGregor was beginning to sense that "although I was paying for the appraisal, it really wasn't mine."
That's because "the appraiser's loyalty really is to that broker, who is going to send him business in the future," says Brian Peart, president of Nexus Financial in Atlanta. But, Peart adds, "Really, the appraiser technically is working for the customer,"
MacGregor continued shopping for brokers even after he applied for a loan. He went with a second broker because the first turned uncooperative. MacGregor asked the first office to mail its two copies of the appraisal, complete with color photos, to the second office.
Didn't happen.
MacGregor grudgingly paid the appraiser $50 for a color copy, then had two color copies made at a supermarket for much less. He sent them to the second mortgage broker's office, which pulled the same switcheroo as the first--replaced his friendly broker with one who was pushy and unhelpful.
MacGregor applied at yet another mortgage broker. He had to pay the appraiser $30 to amend the front page to reflect the name of the third mortgage broker.
The appraiser told MacGregor that the first two brokers were using the appraisals as leverage to prevent him from switching brokers.
Ray Champion disapproves of that tactic but thinks the appraiser was correct. That's why Champion, president of Pro Mortgage Corp. in Dallas, likes to do business in person. "If you sit and look at somebody's face, they're not going to tell you that you can't have your appraisal," he says.
More important, he says, a federal regulation requires the broker to provide a copy of the appraisal. The broker must include the disclosure in the paperwork that accompanies the good-faith estimate. A typical disclosure says: "You have the right to a copy of the appraisal report used in connection with your application for credit."
It's best to request the appraisal in writing. Do it within 90 days. The law allows the broker to charge reasonable fees for copying and mailing.
(Reach Holden Lewis at hlewis@bankrate.com or visit www.bankrate.com.)
Resources BankRate.com
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Website:
www.bankrate.com
