Replies to This Discussion

Permalink Reply by Robin M. Willis on February 25, 2011 at 11:00am

They should at your request be ordering a new appraisal at this point.  What bank is it?

Permalink Reply by Kathleen Lordbock on March 4, 2011 at 4:49am

Their guidelines on this absolutely do not make any sense in a declining market. We are disputting that it was not accurate" then" and getting an value from "then" and trying to sell it now. We also have a market that is competing with other Short Sales and REO property- why can they not be used?  After all this is a Short Sale, not a traditional sale.

Anyone disputed this FHA-HUD rule successfully?

Permalink Reply by Michael Schneider on March 6, 2011 at 9:50am

Yes, Kathleen, I have tried to dispute this with the FHA., at senior levels.  I've posted on this one.

This is a flaw in the FHA/PFS program, and FHA wants to believe the problem doesn't exist.

I wrote a careful memo to the FHA, which they just ignored, because they don't think there is a problem with their appraisal process!

I talked to the Director of Asset Management for Single Family Houseing, who returned a call, and she told me that she had never heard of this problem.  That no Servicer has every brought this to her attention.  So, this must be just me, just an isolated case.

On a practical level, you have I think two strategies for dealing with FHA/PFS appraisals.

1. Wait until you have an offer that you believe is FMV before applying to PFS, then you can try to manage the appraisal to the offer.

2. Apply to PFS before the offer, make sure the listing price is FMV.  Then, try to manage the appraisal to the list price.  If you get a reasonable appraisal, you may be okay.  If not, wait until the ATP period has expired, then try to sell before DIL, with a new appraisal.

Disputing the appraisal is a waste of time in my experience, because you are talking to a brick wall.  For the reason Amanda is stating--the comps are wrong, and the FHA will not look beyond comps.

Keep screaming at the FHA, eventually someone there may wake up from their13th floor hideaway and actually try to understanding what is happening down on the surface of planet Earth.

Here are the address to write to at the FHA:

Himes, Ivery W [[email protected]]

[email protected]

[email protected]

[email protected]

(Addresses and phone numbers, including these, are publically available on the HUD website.)

 

 

 

 

 

Permalink Reply by Amanda Pittman on March 6, 2011 at 10:24am

It's wells fargo and i seem to have the most problems with them.  I do not understand why 25% of the time, i can just simply ask a negotiator to order a new appraisal and there is no arguement. If there are "rules" why do they not all follow them? I will be calling fha in the morning and will just iritate them until i get my appraisal! The hardest part is being just as confused as the homeowner.

Permalink Reply by Michael Schneider on March 6, 2011 at 10:35am

Yes, Amanda, agreed totally.  I also find that Wells is the most difficult of the major servicers, as far as handling short sales where the appraised value is above fair market value.

Overall, I like PFS, except for this rather large flaw.

I assume you have the FHA appraisal dispute "rules"?  They are posted someone on this site. I have them, somewhere. If you don't, shoot me an email [email protected], and I'll try to find them.

Unfortunately, Wells is following the rules, but the rules make no sense in this market.  Wells just "follows the FHA rules"

 

Permalink Reply by Cheryl Miller on March 10, 2011 at 5:25am

If you can show the decline in value with actual "real" comps that have closed AFTER your appraisal- I would suggest you complete your own BPO - submit this to the lender and ask the lender to submit a VARIANCE REQUEST to HUD asking them to accept less than the current min. net - if you make a strong case and escalate to HUD you may have success- The lender seems to always drag on VARIANCE requests, but escalate it and sit on the lender w/ HUD-- if you don't have success- and you are now outside of the initial 120 day window you can ask for a 2nd appraisal (different than an appraisal review- which is usually useless--) Be aware that the 2nd appraisal is FINAL- so if you have to go that route you better have all your ducks in a row, meet the appraiser and make sure they understand the elements of a distress sale, 30 day liquidated value- etc--

Permalink Reply by Jeff Payne on March 15, 2011 at 6:44am

Cheryl has great advice here! 

Wow a 27% drop since October, ouch!