Lender increasing values on Refi?

Question

We are doing a Refinance in our primary and on the disclosures that the lender sent over she has all my rentals listed. On a couple of the rentals she has the market values overinflated, some by over $100,000. She said that the only market value that matters is the primary which we are doing the refi on and that the rest of the values don’t matter. My question is if it doesn’t matter then why not use correct values? Just making sure nothing sketchy is going on?

Matt Devincenzo · Answer

Haha having just closed with Chris last week...I have some of those numbers that are 'wrong'. Here is the thing though I put them in there not Chris! I filled in forms a year ago including values ect, but at the time Chris told me our refi was a no go. Now a year later we go to do it and I refill forms, but just breeze right through all the old docs. Lo and behold our house's value is identical to what it was last year even though our recent valuation (also done as a refi through Chris a few months back) doesn't match that number...like he said those numbers don't matter.

Chris Mason · Answer

Here's come context for you:

You just spent more time typing this thread up than the LO spent putting in fake values.

Now-a-days I have my clients complete the Uniform Residential Loan Application b/c of questions and back-and-forth exactly like this, but I used to do it for my clients based on their paperwork as a "customer service" thing (I was trained to do this by "elders" that had been writing mortgages pre-2008, so as a "customer service" thing they had always put in that everyone makes $25k/mo as a janitor, right?), and I would "estimate" things that I didn't know that also weren't relevant to the application, weren't going to have to be documented, and that didn't matter. Lo, and behold, my clients at the time had lots of children that were exactly 2 and 5 years old, I had lots of clients with 16 years of education, lots of houses built in 1965 exactly (not a year older, not a year younger), and yup lots of whimsical imaginary numbers for the values of other real estate they owned.

Eventually I concluded that less time was spent having folks fill in their own stuff, than was spent with me filling it in for them, and them questioning where/how I concluded that their kids were 2 and 5, the M.D.s pissed that I understated their education years, and so on, all added together. So, now, everyone fills in whatever numbers they want for everything (you want to say the dumpy $200k duplex is worth $750k? Great, whatever, if that makes you happy), and I go in and fix just the numbers that are going to be verified (income, for example) and ensure those are accurate. The borrower sees whatever numbers they want for things that don't matter, the underwriter sees the accurate numbers that they actually need to be accurate, and boom everyone wins.