This is a great article that I have read and re-read. Kudos to Bryant Tutas for writing and sharing it.
From "Short Sales Are Serious Business And Require Serious Minds"
Posted by Bryant Tutas on May 23, 2012
"With a short sale we are submitting CONTRACTS, not offers, to the lenders. We are not asking them to accept an offer we are asking them to accept a "short" payoff so a contingency can be removed from the CONTRACT and the deal can close. Anyone who submits an offer to the lender to see if they will accept it does not know how to handle short sales and is wasting time and clogging up the system.
The lender is NOT a party to the contract(s)(listing or purchase). They do not control the purchase price and the commission..."
My question is, if the lender does not control the purchase price, what is the purpose for the lender to order an appraisal?
There is a contract between buyer and seller where purchase price has been arrived upon.
Why is it that the bank will not release a copy of the appraisal to the buyer or seller? How can a secret (always over inflated) appraisal ever be credible?
The lender simply controls what price (net) they will accept as a pay off. They will either agree, or not. They don't have to justify their own valuation(BPO) whether they should, or not. They are taking the hit, and they want to take the least hit possible. Thus, all the games, frustations and maneuvers we live with.
I wrote that particular article several years ago. Lenders do control the price. They want to make sure they are getting as much money as possible for the property. They can use whatever valuation method they choose.
They will release the appraisal to the Seller but he must ask for it.
Really? I've never seen them release an appraisal and we always ask. What am I missing? Getting the appraisal would be huge!
The Seller needs to ask for the appraisal, they won't give it to anyone else. Ask your Seller to call the mortgage company and request the appraisal, they will give it to them. I have received all BPO and full on appraisals from the Sellers by them requesting. Most lenders will not tell you this.
A mortgage lender is required to provide the borrower with a copy of the appraisal within 3 business days upon request. In California at least, a borrower has up to 90 days to submit a request for a copy of the appraisal. In other states it may be different. Also, in respect to the appraiser-client relationship, a borrower does not have the right to receive a copy of the appraisal from the appraiser themselves. This is because of the contractual agreement is between the lender and the appraisers services.
the Equal Credit Opportunity Act (ECOA) requires that a mortgage broker or lender must inform you how and when you can ask for a copy of your appraisal. ECOA is administered by the Board of Governors of the Federal Reser....
Hi Ron, True, with the differences...I can only say that in the short sales that I was the listing agent, the Seller was always able to get the appraisal by asking. Maybe different in California, not sure.
I always asked the Seller to request it from their lender and knock on wood...never had any issues.
I wanted to see what it appraised for and what homes they were using for their comps.
For now, prices in California are increasing with multiple offers coming in sometimes getting 15-30 offers. There has been an instance or two that some owners that started out with a short sale ended up with a traditional sale, would like to see more of those.
You can get a copy of an appraisal in FHA PFS most all the time and last week we did get an appraisal after pushing in a traditional sale. To be honest, I was pretty shocked and WE a third party firm got it, not the seller.
I would say that is not the norm though.
For FHA, they MUST release the appraisal to the seller. Once, they wanted a note from the seller, the other times, I just ask for it, although it can be like pulling teeth - they are so used to saying that it is private info paid for by the investor. Even in those cases you can fight hard and sometimes get it.
For FHA appraisals it is good info. I'd like everyone to request them - get the bank used to giving them out, too.
I did not look up any guideline - someone in the office told me quite some time ago. I've called HUD for WF and BofA accounts that hadn't responded after a month of requests. I hardly think that they would help me if it weren't true. A quick look, I only found items 21 to 23 in the Uniform Residential Appraisal Report referred to by HUD that the borrow can use the appraisal, etc. But, it ain't my problem - I ask for the FHA appraisal, eventually they send it and HUD backs me, do I really need the guideline? (The answer is no..)
Well, I am good at my job, and I do go beyond what others will do - that's in my nature, but I usually don't take extra time and effort to unnecessarily show what is being done right is OK to do.
Much of the time when a "specialist" does the wrong thing, it is out of ignorance. Once you have one of these appraisals in hand, telling the specialist that you just got it on this other file goes a long way. He can look it up in the notes, so you must be right. Precedent goes a long way with people who have 10,000 rules with 200 files and don't feel like their pay and treatment is wonderful.
I do go to regulations, more than most people - just tried to chase down one tonight with mixed results - the HAFA rules are not as inclusive or together as in the past. In HAFA's case, long ago I found going right to the real docs is far better than trying to find the answers on the net (lots of middle of the road logic, weak nitty gritty). It's "all encompassing" HMA... doc has a lot missing. OK, politicians put this stuff together, but can't they use math and logic just a little bit?
I didn't think that the seller had these same rights with FNMA and others - I'm interested in what others have said here - maybe I'll start pushing for those, too. I have found that when up against a wall, any semi-decent negotiator will give you the needed info in bits - what comps were used. But to get the BPO/appraisal for non-FHA? Cool!!