|
 Rates |
Articles of Interest |
FAQ's |
About Us |
Contact Us |
Links |
Home |
Credit to: By James D. Rudd, President, Attorneys’ Mortgage Services Appraisals are an important part of the home buying and financing process, and mortgage attorneys can help their clients greatly by being knowledgeable about the process and potential pitfalls. Appraisers use a form commonly called the “1004” to evaluate a house’s market value. This document is critical to those who are selling a home, or who wish to refinance. The Loan-To-Value (LTV) determines if the client will pay more for a loan, and the higher the house is appraised, the less of a risk the lender will undertake funding the loan. However, an improperly completed 1004 can significantly impact the closing of a loan. By reviewing an appraisal, you can help protect your client from any last-minute discrepancies, which will cause unnecessary hassles. Look out for these flags: Situation: The property changes hands within a short period of time with an increase in value. Solution: The Underwriter will scrutinize the value with consideration to prior sale and require and explanation from appraiser. Situation: Tenant shown to be residing in owner-occupied property. Solution: The occupancy will need to be re-verified and require an explanation from the appraiser. Situation: Comparables are not verified as recorded or submitted by potentially biased party (seller, real estate broker) in the sales verification field under the sales comparison selection on page two of the appraisal. Solution: The underwriter will require the appraiser to obtain new comparables and will require a written explanation from an appraiser. Situation: The gross adjustments for the comparables exceeds 25 percent. Solution: Underwriter will require new comparables that bracket that subject value and are within a reasonable price range and proximity. Situation: The appreciation of the house in located in stable or declining area. Solution: The underwriter will question the value and require explanation from the appraiser. Situation: The Appraisal is missing information. Solution: The underwriter will require the appraiser to complete the appraisal. This may have been an honest mistake. Situation: Photographs of the house reveal items not disclosed in the appraisal. Solution: There are two possible outcomes: The underwriter will need the appraiser to re-evaluate the value considering the disclosed items OR create a condition for the appraiser to notate that no value was given to that item. Situation: The appraiser indicated the subject property or comparables have sold for potentially less than the appraised value within the past 12 months. Solution: The underwriter must obtain an acceptable explanation from the appraiser. Situation: The borrower is not listed as the “current owner” in the subject suction of the appraisal on a refinance transaction. Solution: The underwriter will request a preliminary title policy to verify the borrower is on the title and owns the property. If the title information notes the borrower recently acquired the property and this information was not disclosed by the appraiser, a request for an explanation from the appraiser will be made. Also, AMS will request the appraiser to explain any increase in the subject’s value (renovations must be documented with the cost of improvements). Situation: The appraisal indicated a positive (an increase in) comparable adjustments for subjective items such as quality of construction or location. Solution: The underwriter will require new comparables that bracket the subject value and are within a reasonable price range and proximity. Visit our other Web Sites :
http://www.HollywoodApts.com - Lomar Apartments - Apartment Rentals in Hollywood http://www.GottliebLaw.com - Gottlieb & Gottlieb - Law Offices and Title Company |
| 125 N. 46th Ave • Hollywood, Florida 33021 | Phone: 954-983-3400 or 800-940-3400 |
| © COPYRIGHT 1998-2003, Best Title Comany ALL RIGHTS RESERVED, REPUBLICATION PROHIBITED |
Webmaster: EasyTech, Inc. |