The appraiser misrepresented the home value by a minimum of $150,000 under market value, based on recent closed sales comparables dated within 6 months of the date on the appraisal report. One sales comp was located right on the same street as the subject property. And a half dozen others homes sold in recent months and were located within .50 - 3.00 miles away from the subject and in the same desirable neighborhood, in fourth quarter of 2007.
Each of the closed sales comps used by the appraiser had the wrong distance indicated on the Appraisal Report. The comps were indicated to be 5 miles from the subject property when in fact, each of the four comps were over 7 and 8 miles from the subject property. The appraiser used comps in inferior neighborhoods located along heavily travelled high speed roads and two were located parallel to Highway 101.
The appraiser made no comments or explanation in the Uniform Residential Appraisal Report (URAR), which is required by the lender and USPAP, for why one of the sales comps used sold for below predominate market sales, nor was an appropriate upward adjustment made in the appraisal repot. No comment was made by the appraiser for not using any of the recent sales on the subjects street and the other six plus neighboring closed sales just 2 and four miles nearby the subjects desirable rural neighborhood.
It seems the appraiser made every effort to go as many miles away as he could, and even crossed over Highways and Freeway into inferior neighborhoods, to come up with the lowest value conclusion possible.
On top of that, the appraiser misrepresented the 'distance' by half of the actual distance to the subject property by four to six miles.
The distance of the comparable comps used by the appraiser are not within the acceptable thresholds set by Fannie Mae, Investors, and Lending Institutions. The distance of a comp in a rural community should be within 5 miles, if comparable comps cannot be found. The distance threshold for all the comps was indicated between two and five miles, "to meet the threshold," when each comp was verified to be miles further away from the subject property, by three and five miles, than was indicated on the appraisal report; hence, an additional appraisal misrepresentation.
The lender verified the validity of this concern and I asked for an investigation be launched with Landsafe Appraisal and the appraiser, Ken Minor who was hired for the assignment to appraise a rural property in the Monterey county. No response was received regarding the concerns posed to the lender about the appraisal issues and or investigation into this matter.
I asked Countrywide Homes Loans why Landsafe Appraisal did not hire an appraiser from Salinas or Monterey, or an appraiser in other cities located in Monterey County who have experience appraising properties in the Monterey County Rural area. This was the original request made a time of loan application with Countrywide Homes Loans over the phone.
This request was later put to writing directly to the processing Countrywide local branch office in San Jose, on Stevens Creek Blvd. I made calls and sent emails to Countrywides' loan processor/ underwriter, Office Manager, and Sales Manager. This request was made prior to the order being place with Landsafe Appraisal and fell on deaf ears.
I understand the customer is not allowed to "choose who performs the appraisal," as this would be a conflict of interest, but shouldn't a reasonable request for an appraiser be assigned to perform the appraiser who is a qualified appraiser "familiar with the Monterey County rural neighborhoods" at least be adhered by?
Is the lender hiring an appraiser who will accept lower fees and is not qualified to perform the more challenging appraisals amongst mixed used properties on acreage and within the farming communities?
January through February of 2008, I never received a response to my questioned posed to Countrywide Homes Loans surrounding this appraisal misrepresentation. I am out of pocket the cash paid for the up-front application fee to start the loan process; $595, which is not refundable unless the loan closes.
I did my research into closed sales comps within this rural community before making a loan application and I was fairly confident that the loan would be approved at the 80% loan to value requested because of the predominant and current values within my neighborhood which I have lived for seven years.
I am a California DRE licensed Real Estate Broker professional with a career spanning twenty-nine years in the mortgage lending industry.
I feel for all of the victims who have reported to a Rip-off Report on Countrywide Home Loans and Landsafe Appraisal. I hope that everyone writes a complaint to the State Attorney General to get positive results and hope for changes to the current lending institutions business practices.
Enforcer; Prunedale (Salinas), California.
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