Lenders who will use an existing appraisal for washout refi
Investor · Clearwater, FL · Member since 2013 · 69 posts · 38 votes
Lenders who will use an existing appraisal for washout refi
5 Replies
- Lender · Baltimore, MD · Member since 2020 · 115 posts · 70 votes5y
Hi Amy, I'm not aware of a lender that will accept an appraisal that they didn't order for a cash out refi. However, there are two options that could work here. The first is that the original lender agree that the appraisal report be assigned to the new lender. This may require an executed "appraisal transfer letter." If the original lender is not amenable to granting permission for the appraisal reports to be assigned to someone else, you can also connect directly with the appraiser and just ask the appraiser to refresh the appraisal with the new lender's name. It will be minimal work on the appraiser's part if the appraisals were done very recently, and the appraiser is likely to charge a much lower fee than if the appraisal report was being done from scratch.
- Lender · CA · Member since 2019 · 82 posts · 46 votes5y
@Amy Davidson, I am so sorry that happened to you. I can't imagine spending that kind of money and getting lied to. Yes. You would need a release of the appraisals. Do you think they would release it to you? That's horrible how the company did a bait and switch. Such bad business ethics, Can you disclose who?
- Lender · Long Beach, CA · Member since 2013 · 496 posts · 296 votes5y
Yes, a new lender can use an appraisal from a different lender. But normally, the appraisal is owned by the old lender (they are the client to the appraisal company), so you will need their permission. Unfortunately, some lenders don't play nicely.
- Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes5y
Originally posted by @Amy Davidson:
I've just set up to do a cashout refi with a VERY well known hard money lending company, and suddenly they're pulling a bait and switch on the terms, etc. I'm doing 7 properties which means I've fronted the bill for 7 appraisals, 7 surveys (!!!) and 7 sets of title work that my lawyer was doing, so about $1000 - 1200 out of pocket per property, and I don't want to do business with this lender.
My lawyer says all the title work will be valid for about another 6 weeks if I want to switch lenders, but I'd like to avoid paying and waiting for appraisals again.
Does anyone know of a lender that will use appraisals that they didn't order and pay for? I know it's a long shot, but I'd appreciate any leads.
Many thanks,
Amy
It's actually a two part problem. Yes, you need a new lender that will agree to use the appraisals ordered by the old lender, wherein the old lender is the client, and no duty of care (etc) is owed to the new lender. Great.
But not quite done. You ALSO need to convince your current/old lender to authorize the transfer of all 7 appraisals, and voluntarily watch that business walk out the door.
FYI if you need 3rd party confirmation: Yes, rates got about 45 bps worse today, compared just to yesterday. That'll be the same everywhere, if your rate was not locked.
Also, and I'm about to read between the lines a bit and speculate, this part could be inaccurate depending on how my crystal ball is functioning today: Yes, it's also true that >6 financed properties may have a hit, and if your LO doesn't have a lot of experience working with REI, they might not have known or checked for that on the front end. It could have been a good faith mistake, FWIW. In answer to the next obvious question, it's also against the rules for that person to actually take a pay cut to make things right with you and what they quoted, that person actually has to convince a non-consumer-facing person in management to take a pay cut, if that's the goal. Further, knowing the size of the >6 prop hit you may be looking at, and what middle management makes, they actually couldn't take a large enough pay cut to make it work, they'd have to forego their compensation not only on these 7 loans, but also another 15 or so. And if that LO you are speaking with is not a top producer, but a barista-turned-loan-officer, due to the events of 2020 (I'm not saying that in a negative way, a LOT of baristas got into the mortgage business after March 2020, and guess who is most likely to mis-quote the >6 property hit? Yup, you got it!), they probably will not be able to convince them, because that person in management already knows every single thing that I just wrote, and doesn't give a crap about the former barista, since they're slated to be laid off the moment rates go up another notch (the barista-turned-LO does not know this, but at least now you do), so why do them a favor?
- 5yGeorge DespotopoulosBusiness MemberLender · New York, NY · Member since 2016 · 936 posts · 287 votes
@Amy Davidson -- yes, those appraisals can used. Would need to quickly review the reports to make sure it's satisfactory. You don't always need a transfer letter from the current appraisal, especially if you paid for the reports already. You can send the appraisal and with a secondary appraisal review, it may be used. Happy to answer any questions.
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