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bdare · Joined: 31 May 2009 Posts: 1 1.47 Dollars($)

We applied for a reverse mortgage. Our property was appraised a year ago at $900,000, and we were expecting to get the full benefit of the 625,000 limit which would have net us around 390,000 on the reverse mortgage. All we needed was the fha appraisal. Well, the appraiser devalued our appraisal with one of his own and said our house could only be appraised at 500,000 to 550,000 because THERE WERE NO COMPS IN OUR AREA FOR A HOUSE OUR SIZE!!! No homes were sold in our price range for the last year so we get penalized about 89,000 LESS than we would have gotten had there been homes sold in our price range. Where is the justice in the bank's criteria for choosing such an idiotic method of assessing value of a home. Just because no one bought homes in this area as big as mine does not mean my home is worth any less! Actually there are NO homes as big as mine in this area. We are dumbfounded that this could happen. Is there anything we can do? Thanks.

jenkin7 · Posted: Mon Jun 01, 2009 2:55 am Post subject:

Hi bdare,

Appraisals are primarily based on what the other houses in the neighboring area have been sold for. But the value of the sold houses that are used as comparables for the appraisal have to be of the same size or within 20% of the size of the subject property. Otherwise, they cannot be used as comparables. The comparable should ideally be within 5 miles of the subject property and should have been sold in the last 6 months. If there are no eligible comparables in the locality, the appraiser has to expand the search through size, distance from the subject property and time of sale.

Have you closed on the mortgage? If you have not yet done that, you can always back out of it and look for other lenders willing to offer a reverse mortgage on a higher appraised value of your property. You can also seek a no-obligation free mortgage consultation with the lenders in this community and seek their suggestions regarding this issue.

gmakerley · Posted: Mon Jun 01, 2009 7:04 am Post subject:

i dare say the term "overbuilt" comes to mind. i'm pretty certain you don't agree, bdare, but when one home far exceeds the predominant value of homes in the area, it becomes a major stumbling block in the lending process. please recognize that i intend for the word "major" to receive full emphasis.

apexoffice · Posted: Mon Jun 01, 2009 7:55 am Post subject:

Hi bdare,

The truth is that you may be 100% correct. The appraiser should have used sales of properties that are comparable to yours. This should be done whether proximity parameters are extended or time frames are extended, i.e over 1 year. The problem is that many lenders only want "round peg" loans which can be easily sold in the seondary market. As a result, they only want appraisals where the value is based on the most recent and proximate sales, regardless if they are comparable to the subject or not. I am glad that you picked up on the fact that it is the bank's criteria and not an FHA guideline. You can try to get a second opinion from another appraiser but there is no guarantee that the bank will accept it.

Guest

-----i dare say the term "overbuilt" comes to mind. i'm pretty certain you don't agree, bdare, but when one home far exceeds the predominant value of homes in the area, it becomes a major stumbling block in the lending process. please recognize that i intend for the word "major" to receive full emphasis---
First of all person from CT. I don't agree. You have to live here to get it. We are in UTAH. They have huge families here and therefore huge houses are not uncommon. There are 3 separate residences in this house and it was built for extended family in mind, especially in times like these when people are losing their jobs. My bitch is with the criteria and the idiot who thought it up. It needs to be changed.

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not happy with reverse mortgage