5 On Your Side

Lack of Appraisal Holds Up Couple's Refinancing

Posted January 25, 2007

— A Granville County couple wanted to refinance their 18-acre spread, but they ran into a snag with the appraisal.

A property appraisal is a critical part of the process when buying or refinancing a home. The bank or finance company wants to know how much a property is worth before they provide a mortgage.

Chris and Kathy Johnson thought they had everything lined up for a new mortgage on their property near Creedmoor last September. The beautiful land has plenty of room for hound dogs, miniature donkeys and even llamas.

The Johnsons were working with Aegis Mortgage Corp., and all the paperwork seemed to be in order, Chris Johnson said.

"It was a done deal. They just needed the appraisal," he said.

Aegis sent Jeff Johnson, no relation, to handle the appraisal. Chris Johnson paid him $350.

When weeks passed without word, an Aegis representative called the Johnsons to say the appraiser was still trying to find a comparable property on which to base the appraisal. Weeks later, he called again to say Jeff Johnson couldn't complete the job.

"I said, 'So, you're telling me he cannot appraise my property?' Chris Johnson said. "(He said) 'That is correct.'"

Jeff Johnson agreed to pay back half of the appraisal fee. But after more than three months with no appraisal and no refund, Chris  Johnson called 5 On Your Side, saying he was fed up.

"Finally, you throw up your hands and say, 'I'm tired of this. I don't want to be lied to anymore.' Half the money is just not good enough. I want the whole truth. I want the whole refund," he said.

Within 15 minutes of a 5 On Your Side call to Aegis, Jeff Johnson called back.

He blamed the delay on having a "difficult time" with his business. He said he couldn't come up with an appraisal for Chris and Kathy Johnson because he didn't think the figure he would come up with would "meet their needs."

"So I just stopped," he said.

A spokeswoman for Aegis said the company is as unhappy as the Johnsons with the appraiser's actions. Appraisers who don't "play fairly with customers" are removed from the company's approved list, she said.

The next day, Jeff Johnson brought the couple $350 in cash.

"I would think (this property is worth something)," Chris Johnson said, adding that he just doesn't know how much.

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  • dandwappraisals Jan 31, 2007

    Whatever you do, please don't hold Aegis harmless. I did a lot of work for Aegis in 2005, but all of 2006 not one job, but hundreds of comp checks. Believe me, Aegis cares only about the deal, not the customer. They are the best at shopping around for value. Not me anymore.

  • annemieke Jan 31, 2007

    ladams29 -at- bellsouth -dot- net stated that "you don't pay for an appraisal up front". Most appraisers doing these types of assignments are independent from the mortgage company and the loan process and have no stake in whether or not the loan closes. His/her sole responsibility is to provide an objective estimate of value. And yes, the appraiser SHOULD be paid up front. First of all the appraiser should be paid for services rendered REGARDLESS of the outcome and second the appraiser, an a disinterested third party, can not be in a position of giving the impression his/her opinion of value has been influenced by the loan closing so he/she can be paid for those services rendered.

  • NCJoe Jan 31, 2007

    I'm an appraiser and the problem here is very common. Mortgage companies pressure appraisers all the time in violation of federal laws. There are ALWAYS comparables. The problem is that many times the comparables don't support the inflated value being sought by the mortgage co. and the borrowers. Then after the appraisal comes in under value, no one wants to pay the appraiser for his work. Appraisers are intended by law to be disinterested third parties, but mortgage companies continue to illegally fish for values before the appraisal is even begun to avoid paying for an appraisal they don't like. In this case I would have completed the appraisal no matter the value, and kept the $350. Of course this mortage co. would never send me anymore work, but I don't want unethical customers anyway.

    See www.appraiserspetition.com for the thousands of other appraisers who see this as a big problem.

  • BIG YAWN Jan 31, 2007

    As delta_nine mentioned, the rest of the loan process should have been put on hold until after the appraisal was done. In fact I don't see how the numbers could have been done without it. Someone else isn't telling the truth. At any rate an important thing to ask before financing or refi is "will I be charged the appraisal fee if my loan isn't approved"? Companies like Wells Fargo won't charge you the appraisal fee unless they approve your loan. Then you have the option of paying it up front or rolling it in to your loan. Others say sorry, try again next time.

  • crazymom501 Jan 29, 2007

    This is a very big problem in Granville County because alot of the property is in a rural area?? I have property on both sides of me going up for 300,000 and more and my property value has not moved any because we are in a rural area!!!!!!

  • ashpitt Jan 28, 2007

    Hey mjburke@onebox:

    Why do you think the mortgage company is at fault for the appraiser's failure to deliver? The appraiser is not an employee of Aegis. Aegis has no control over the appraiser's level of professionalism. And your comment "average 2-4 points" is laughable. You've been watching to many Di-tech commercials. Hey, maybe you're getting paid too much - perhaps you should pay for their next appraisal.

  • Ladybug Jan 28, 2007

    This sounds like there are people involved that don't know what they're doing - and, you don't pay for an appraisal up front. Most times, this is handled in the paperwork of the financial institution that is handling the loan. I would be very suspicious of the loan company too.

  • deltanine Jan 28, 2007

    What morons. How exactly does one hand off something as important as an appraisal to a loan officer without being exactly certain of when it will be completed? I was a loan officer for many years and I would NEVER allow the paperwork to be filed if there wasn't an appraisal ALREADY completed. The bank requires it so it must be completed prior to anything else.

    Oh, the moron remark is to thw property owners and the loan officer... clueless.

  • annemieke Jan 26, 2007

    The appraiser should have done one of two things:

    1. If this assignment was too complex for his abilities, he should have declined the assignment. OR

    2. He should have finished the assignment and submitted the report. It could be that the appraisal used to buy the property previously was inflated or that the values were declining in that market. Whatever the case, the report should have been finished and submitted.

  • mjburke Jan 26, 2007

    Aegis should not have let this go this far. They should have hired another appraisal and picked up the fee. Believe me, Aegis was going to make plenty of money on the deal...average 2-4 points!