It may be a great time to consider refinancing your home, but besides the well-publicized issues associated with it, here's one more thing I bet you never thought to worry about!
Mr. D. bought a foreclosed home in the spring of 2009. The original sale price of the home when built in 2005 was $325,000; his purchase price was $82,000. The home was and is in excellent condition. He sought to refinance this past fall with Quicken Loans.
In the initial discussion with a loan officer, Quicken assured Mr. D. that a re-fi for $125,000 (his original request) was perfectly reasonable.
Unfortunately, the appraisal company that Quicken hired operated unethically. Given the local real estate market, the appraiser should have used one foreclosure sale and two person-to-person sales - of similar size homes - as comps.
They didn't.
They chose to use one regular foreclosure, one bank repo sale to Fannie Mae/Freddie Mac, and one short sale. Only one of the homes was similar in size.
Despite appeals and statements from other independent appraisers, Quicken chose to refuse to allow a second appraisal, even when Mr. D. offered to pay for it out-of-pocket. They then refused the original loan request of $125,000 and countered with an offer of $92,000.
Here's where they get even more rotten: Quicken's own contract states that deposits are refundable in the event they refuse to provide a loan. I'm no legal expert, but I know that a counter-offer is a reconcilliatory gesture after the refusal of an original request. Guess what? They refuse to return Mr. D.'s $400 deposit.
Quicken - up to now - has enjoyed a decent reputation as a lender. If this is how they do business, imagine what some of the other companies are doing! My recommendation: before you sign anything, get the lender to include a stipulation that allows for a second appraisal in the event that the first is poorly done. Also, be sure to read the fine print about the deposit they collect and try to be sure you'll get your money back if they refuse - regardless of their costs.
Hi! My name is Kelly and I work for Quicken Loans. I'm not familiar with this particular loan, but I'd like to look into it. In the case of a denial (which this sounds like), we do refund, minus costs incurred. Our policy is online here: https://www.quickenloans.com/about/quicken-loans-deposit
ReplyDeleteIf you'll have Mr. D get in touch with me, I'm happy to look into this: Kelly@QuickenLoans.com. Thanks for posting this.
Kelly
Just got word from Mr. D. that the state Board of Appraisals has completed their investigation of the appraiser company (at his request, not Quicken's), and taken disciplinary action.
ReplyDeleteMr. D. is already calculating the losses incurred as a result of Quicken's determination to use a company with a bad record. Oh, and as it turns out, this appraisal company already had one serious complaint against them when they showed up at Mr. D.'s house! So I guess that means they knowingly chose to work with a less-than-reputable company.
The ball is now in Quicken's court, but I think you can all see where this is headed....