Serious incompetence - ignore or fight?

In reply to spitfirebill:

Doesn't make any difference who pays for it.

There isn't going to be a 2nd charge.

Appraiser works for bank. Bank tells appraiser he made mistake. Appraiser fixes problem, because he made a mistake and wants to keep working for the bank.

Happens all the time, in every business. You didn't really even need to know.

You are doing the bank a favor by bringing the error to their attention.

Let the bank deal with the problem. Bank works for you. Appraiser works for bank.

In reply to 1988RedT2:

I'm not saying to stand by and accept incompetence, just not expect to evereradicate it. (Also noticed and LOLed that I typed 'to' instead of 'too' while complaining about incompetence. That's what I get for posting from the E36 M3ter on my phone.)

I guess the word "fight" may have been a bad choice.

I believe I do a pretty good job of staying calm and self-advocating and getting what I want. Problem is, I will be very surprised if fixing this error is easy. I see it taking weeks and requiring me to put in loads of phone calls and sitting through holds and leaving messages and following up and re-explaining over and over, just to fix someone else's berkup.

And I have to do it, because the line of credit isn't fully established yet. So if I want my credit line, I have to drag them to the finish.

Come to think of it, that sounds exactly like a "fight" to me, like to fight against the giant waterfall of incompetence and make tiny headway upstream. Maybe I am making unfair assumptions about the people who will be involved. Maybe I am wrong about this whole thing, in which case I will be pleasantly surprised.

In reply to Robbie:

I really would not have done a thing. It has a zero impact on you (unless the appraisal is lower than you need)

You pay for the appraisal and, by law, you are entitled to receive a copy of it. An ACCURATE appraisal can come in handy for you in many ways, including fighting tax assessments, having documentation of square footage and understanding comps should you decide to sell, valuation for estate or divorce purposes, etc., etc. I'd insist on it being right so I could use it beyond the short term benefit of getting the HELOC. Especially since you are paying the appraiser to do it right in the first place.

This happened to a friend of mine who was trying to refi, the bank declined To refi because the other house was a pile. He tried to fight it but they wouldn't try again for 180 days. This is his version of events but I had wondered how that could even happen and here yours is a second example....

I'm not arguing whether you have a right to an accurate appraisal. Certainly you do.

The accuracy, however, is not incumbent on you. You bear no liability for it's accuracy.

You said time was of the essence, and that the appraisal did not effect you negatively (lower appraisal). Therefore, it has little meaning.

You can't use the appraisal for much of anything else (another bank will not accept it, etc.). The only thing accomplished by pointing out the error is a loss of time.

A lot of people seem hung up on the fact that you pay for the appraisal. That's true, but it is a pass-through fee. You don't order the appraisal, and the appraiser's ethical responsibility for accuracy is to the lender, not you. Basically, you are paying an expense for the lender (in the old days, these were paid for by the bank, not the borrower). It's a banking slight of hand that has made them billions, and cost borrowers.

So yes, you paid for it. But no, you don't own it, and are not liable for it. It is for the bank's protection, and it is in their interest that it be accurate.

Could it help later with something like a tax assessment? Maybe.

This is essentially the equivalent of an internal clerical error at the company known as the bank. They screwed up, and it could have effected them badly. All businesses have similar things happen regularly. The only difference in this situation is that you have a right to see a copy of the report, and found the error.

They did the same to me, but i got declined because they went to a different street and 1131 on that street was a dump. I quit using them

SVreX wrote: You can't use the appraisal for much of anything else (another bank will not accept it, etc.). The only thing accomplished by pointing out the error is a loss of time.

Not true. Another bank may accept it, but it requires the the first bank to assign it to them. We do this all the time (I'm a banker financing real estate). We usually have no trouble doing this bank-to-bank as it is a common practice and banks see it as a mutual benefit. However, there is no obligation of the first bank to cooperate and mortgage companies are a different animal altogether.

In reply to Basil Exposition:

OK. Another bank will not GENERALLY accept it, (THOUGH THERE ARE A FEW EXCEPTIONS)

(sigh)

What's wrong with getting the heloc, waiting a week, and then saying:

"Btw, I noticed the appraisal is for the wrong house. As this may negatively affect me in the future, I'd like this to be straightened out."

In reply to jamscal:

That's probably what I should've done. Turns out, US Bank just got really sneaky on this with us.

We originally got quoted from them using our "estimated" value of the house. They said we could get the credit line we wanted (plus 20k more) if the house appraised at that level, and keeping all other factors the same. They quoted us 1.99% interest for first 6 months and 4.04% after, though it would not be fixed.

The appraisal of the other house came back only 10k lower than I guessed our house was worth, and since they could just lower our credit line 10k and we would still have more than we wanted it would have been fine financially if I kept my mouth shut.

However, here's where US Bank saw an opportunity to be dishonest and sneaky and they took it. I told them about the incorrect appraisal Friday mid day. Friday afternoon, they called and said they had done a revision that didn't change the value of the appraisal, but that they were willing to offer the same line of credit that we discussed before. They wanted to offer congratulations that I was approved. Then they ran through the terms quickly. 2.49% first 6 months and 4.84% thereafter.

I said "hold on, that is not what you quoted me". And they said, "it's because you are asking for a higher loan to value ratio than we thought". I said, "tell me how much the credit line has to come down to get me back to the 4.04 you originally quoted me". They said they would ask and call right back.

They did call right back, and said "actually, we decided to redo our appraisal in order to get the real value of your house so you can get the whole loan you asked for." I said "that literally has nothing to do with what we just talked about. Can you tell me what the credit line would come down to based on the lower appraisal value?" They said sure we will call you right back.

Called back again to tell me there was no way they could give me the 4.04% without a good appraisal. Interesting - so I try to identify a mistake for you, and you repay me by trying to sneak a higher interest rate on me because you now know the appraisal is bunk?

Morons.

New bank time.

You know I would consider bringing this to your states banking commission. They might want to know about this story. Right up to the last post it was just a clerical error. Now it is a bate and switch with a brake down of the systems checks and balances.

Banks care very much about what their regulators have to say about them. Consider this a strong second on the idea of reporting your experience to a regulator.

Appreciate the responses everyone, and I will likely report this to the regulators after all is said and done. I also will switch banks as soon as freaking possible.

Called last night for an update. Spoke to branch manager. She said (based on what she saw in the system) that they had received the appraisal and that basically they were ready to close, but the personal banker working my loan was out on Tuesdays so I would get a call first thing tomorrow morning.

I didn't get a call this morning so I called them. Talked to the personal banker who said that the new appraisal has not even been ordered yet. She is very apologetic but cannot explain why there has been no new order. She does insist that the district manager is now involved (one above the branch manager) and they will have an update by noon. Not holding my breath.

Sometimes, I hate being right.

SVreX wrote: You can't use the appraisal for much of anything else (another bank will not accept it, etc.). The only thing accomplished by pointing out the error is a loss of time.

We used the bank ordered appraisal to contest the valuation of our house with the county taxing authority. They accepted that appraisal no problem. You can use it for almost anything you'd use an appraisal for, I'd imagine.

I had a chance to talk to someone who is a bit more expert than I am about an hour ago. This is a little outside of my expertise, so any errors or omissions are likely mine. This is all casual conversation too, so IANAL, this free advice is guaranteed worth what you paid for it, nobody is offering this as a professional or official statement or opinion.

Much the the above about offering a loan on a known bad appraisal raised eyebrows. You should have a right to dispute the appraisal. This tends to work best when you have a factual and articulable dispute that you're able to submit in writing. i.e. The appraisal has a picture of a different house.

If you don't get satisfaction from the bank, the best route for your complaint is probably the CFPB. https://www.consumerfinance.gov