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I am in escrow and the appraisal came lower than the contrac

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the bank cant cancel the deal

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I am in escrow at 190,000 the appresal came at 165,000.bank do not wants to drop the prize.will i loose the money i have in escrow.

adonis · Posted: Wed Nov 19, 2008 9:54 pm Post subject:

Welcome Rene,

Are you trying to say that you've applied for a loan worth $190,000 and the escrow account has been set up? Please clarify your question. As far as I understand, you shouldn't lose escrow money just because the appraisal came in low.

carlpruitt · Posted: Wed Nov 19, 2008 10:34 pm Post subject:

I'm sorry to hear you're having a problem. This is becoming more common every day.

We can't really give good advice without a little more information.

Typically, if your purchase contract specified that you must be approved for financing under certain terms, and the low appraisal causes your loan to be turned down, you would have your earnest money returned.

However, when you say the bank won't drop the price it sounds like you may be buying a foreclosure property from a bank? If so, many of those remove the financing contingency right away and you might well be in danger of losing earnest money.

gmakerley · Posted: Thu Nov 20, 2008 8:37 am Post subject:

rene, carl has stated what you need to know. if the appraised value will not support the loan you've requested, the lender will decline your application for mortgage. in that circumstance, you should be able to get back your earnest money deposit. are you working with a realtor in this instance? if so, that individual will be able to assist you in recouping your money. if not, then you need to seek the counsel of a real estate attorney who can assist you.

i wrote all that without reading carl's last paragraph - oh well...here goes. the bank, if that's the case, has no more right to rip you off than any private individual. once again, check with your realtor or with a good real estate attorney to protect yourself.

carlpruitt · Posted: Thu Nov 20, 2008 8:50 am Post subject:

George,

Since I wasn't clear about the circumstances, I used the normal circumstances I consider most likely first, but then I noticed that Rene said the bank does not want to drop the price.

Unfortunately, I have seen more than a few banks lately insist on having no financing contingency in their contracts before they agree to take the property off the market. Although I understand where they are coming from, I think its a terrible practice which will only serve to build up more ill will toward the banking community. I hope this isn't the case and that Rene had a real estate agent who would have protected her from that, but I wanted to cover all the possibilities.

elnoralittle · Posted: Thu Nov 20, 2008 6:40 pm Post subject:

I am not sure if you have a realtor representing your interests or if you used the same realtor as the seller.
The majority of contracts are written that if you cannot obtain financing then you are let out of the contract, also the majority of contracts state that the house has to appraise. You can't be expected to pay more than the house is worth and more than you can afford. It would be steering you into a mortgage that is not in your best interests, and it is illegal.

If you would like one of the lenders here to review your contract, I am sure any of us can help.

Becareful, there are people out there that will pressure you into a loan or a purchase that is not right and will use scare tactics. It is wrong on so many levels, but it still happens unfortunatley.

Please let us all know how things work out.

gmakerley · Posted: Fri Nov 21, 2008 9:10 am Post subject:

good post, elnora. i agree with all your comments. the number of scam artists at work these days (need i call them agents of the devil?) is alarming. and they won't just stop at the poor and downtrodden; they'll try to perpetrate their schemes on every segment of society.

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