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Refis bearing the brunt of 'appraisal alert'

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Mortgage Broker News | 04 Jul 2012, 09:00 AM Agree 0
With the maximum loan to value for refis reduced to 80 per cent, banks may be adding insult to injury with more conservative appraisals for refis, argue brokers.
  • Stephane Prevost-DLC Alliance | 05 Jul 2012, 04:27 AM Agree 0
    I had 5 appraisals in a 1 week period come in low. One was 23k lower and Realtor still pushed my client into the purchase of an undervalued home.
  • Kevin St. Amand | 05 Jul 2012, 04:56 AM Agree 0
    How true! I have had an appraisal done in the Leduc, Alberta area, when it can in $20,000.00 less than an GE appraisal two weeks prior as I had switched lender to avoid insurance premiums for client.
    I contacted the appraiser to discuss to no avail, he was not interested in taking another look to see if anything could be done. When I contacted Brokerworx to escalated the file, they told me to get another appraisal and maybe I would get a better value! Yes this industry is very subjective and the lenders buffer themselves with companies like Solitifi, Brokerworx, etc. I think these appraisal brokerages companies need better screening processes of these appraiser as they have no consistency and don't care about the outcome as long as they get paid.
    The last appraiser came in 15% higher than the first appraisal done using the same comparables! I ended up losing the deal back to original lender as client got tired of waiting for escalation process and new appraisal, etc. Should be a wake up call to the lenders!
  • RANJIT DHILLON CENTUM MORTGAGE SMART | 05 Jul 2012, 05:32 AM Agree 0
    Appraisals are not giving the true Value of the Property. They should be using the same methods of appraisals what they learn in the course to get the true value but I have noticed in GTA the appraisals are only focused to be in the good books of the lenders so that they get more recommended by the lenders and get more business. I have appraisal reports where the value is more than $100K on same property in less than 4 weeks, both done by the Certified Appraisal but for different lenders. If it is a MLS Sale does not matter if the property is sold for fair market value or not the appraisals will give the exact same value figure. If it is a Brand New built House they will go exactly same as what the client paid for 2 years ago.
    It shows more that the appraisals are not fair to the clients but yes they are very particular to make the Lenders happy who gives recommends them.
  • Paul Therien, CENTUM | 05 Jul 2012, 06:24 AM Agree 0
    It is interesting that the value of a property can be different based on what the requester has asked for when ordering the appraisal. It defeats the purpose of having a value assessment if the person doing the assessment cannot, or does not, remain objective. This applies to any appraisal completed, and regardless of who orders the appraisal. The value of the home should be the value, period. That being said – appraisals have ALWAYS been subjective and can have large fluctuations in a relatively short period of time – it is the nature of the beast.

    Perhaps it is time that the broker community through CAAMP or the regional’s (MBABC, IMBA, AMBA, etc) engage in discussions with the National Appraisers Association?
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