Saturday, November 17, 2007

The Appraisal

As an appraiser I have noticed a big change over the past year on how banks are being more cautious about what the appraisers are sending them. When I send in an appraisal now I typically get a phone call from the mortgage underwriter asking about different sections of the report. Most of the time it is just to clarify some of the information. Granted most of the underwriters know nothing about Allegany or Garrett Counties, and typically they don't understand why I would be need to go more than 1/2 mile away to find a comparable property or why the houses I used for comparison aren't exactly like the subject property. I guess in the big city suburbs it is easy to find hundreds of three bedroom, two bath, 1500 square feet ranchers. So as you can imagine, I am usually trying to explain how our area is not like the big city suburbs or downtown's. In my opinion it is a good thing that I get to interact with the people reviewing my appraisals. It gives me feedback an helps to put out a better product.

A year ago I could go months without talking to anyone. There were times I believed that I could send in anything and the loan would get written because the appraisal really didn't matter. All that mattered was that banks had a lot of money to give away and their job was to get it out the door as soon as possible. I know that several of the appraisals that I turned down last year, because I was sure that the property was not worth what the bank was trying to lend on it, did end up being appraised by other appraisers. Typically they would come from the Baltimore/Washington area and like the mortgage underwriters know nothing about the area. I have reviewed appraisals that have compared houses on Columbia Avenue in Cumberland to ones on Washington Street. Anyone who has visited the area for any period of time knows that this is like comparing concrete to wood. Just goes to show how far some banks will go to make a loan.

I know that these are my opinions and luckily many of the local banks and mortgage brokers have high morals. This is why the market in our area is still in balance and hopefully will continue that way.

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