Our firm just did a desk review for a national lender on a one family property in our market area. This is the same lender that gave me a hard time last month for being too slow and suggested that if we didn’t get the reports in faster, we would be removed from the panel because we are 2 days slower than everyone else.
Yesterday, I reviewed a report done by another firm who is much faster than us. Our firm was actually in several of the comps used and the square footages were grossly understated. The comps were taken from other locations that were vastly superior. The property had significant functional and external obsolescence issues which were not noted in report. The name of this firm is well known in the market for this type of work product, but boy are they fast!
Incidentally the property was over appraised by more than $1.5M for a cash-out refinance. mmmm…48 hours faster….$1.5M over appraised….thats…$31,250 per hour in additional exposure for the lender.
We run across these discrepancies of this size nearly every week. Of course, no one remembers how fast the appraisals were done when the loan goes sour.
The problem is on both sides of the transaction. Large lenders can readily track turn times but have not figured out quality. Not surprisingly, there are many individuals (not deserved of the title “appraiser”) who can meet this need for speed.
Tags: Soapbox Blog, Appraisal Pressure, Appraisal Process, Mortgage Fraud