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Appraisals for multiple lenders?

I have a question regarding appraisal fees.

I am shopping around for rates for a refi on my home. One direct lender I am working with has given me the GFE and wants to schedule an appraisal of the property. Since I am not ready to commit to this particular lender just yet, I told him I don't want to pay the $400 for the appaisal fee. He countered this by saying a new law has been put in place that says home owners can use the appraisal for multiple lenders/brokers and also also offered to refund my $400 if I chose to work with another company. (on GFE)

Another lender I called (also direct) said they had only 3 or 4 approved appraisers so the $400 I paid before would essentially have to be paid again.

Can someone please enlighten me on what the rules are here. I have always been in the know about the latter so having the ability to shop around with the same appriasal is new to me and I have not seen anything on the WWW about this.

Please advise  
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May 11 2010 - Almaden Valley
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Answers (8)

With my bank, we do the following at application:
Lock your rate for 60 days, obtain a full appraisal, get underwriting letter (approval or not.)  There is no upfront fee.  If the loan does not close for any reason, there is no cost.  If the appraisal comes in low, you are not approved, or you just change your mind, there is no cost -- truly risk free.  This is for all: Refi, purchase, owner occupied, 2nd home, investment property.

We manage our appraisers internally and do not use an AMC.  They make more than if they worked for an AMC, and we get good quality appraisers on our fee panel.
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May 21 2010
New (HVCC) rules for appraisals require a 'third party' or middleman order the appraisal from the appraiser, and that the lender can not do it, or put pressure on us about the value - a type of firewall, so now we never talk to the lender, only the AMC (appraisal management company).

The AMC charges you $400 and we get $200, they keep $200, BTW. There is no 'new' rule allowing you to be able to use your appraisal at 'multiple' lenders.

Bottom line credit is tight, and you will have to pony up the $$ to one or more lenders for your loan. You'll maybe also need two appraisals even for one lender. BTW the norm is you pay for the appraisal, and the lender - when the fund the loan - reimburses you.

Best to arm yourself with good comps, and have a realistic idea of the value of your home  - u be your own appraiser. Use Zillow, Trulia, Realquest Express and talk to an appraiser or two (without paying them) and see if they will be nice enough to get you comps (or ask a Realtor) . Just know the comps in your area must be within three months and appraisers factor in active and pending listings, as well as market trends. Demand the appraiser that you actually PAY for is from your AREA, not 100 miles away. If thats the case, and is very typical these days, you'll get a shiity appraisal.

I wouldnt go with lender #1 as they dont know the 'new' rules very good. And I dont know what GFE refers to...



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May 15 2010
I agree with everyone here. Most lenders will charge you for another appraisal if you have already recieved one elsewhere. However, should you close the loan with the new lender after paying for the new appraisal, they will credit you the cost of the first appraisal order.
Do not commit to any broker/lender before knowing who you will close with.
Good Luck
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May 15 2010
Unless the appraiser is on the approved appraisers list for the new lender it's highly unlikely that another lender will accept the appraisal.  It's a common tactic among less than honorable lenders to get you to do an appraisal because they know that 9 out of 10 times you'll come back to them regardless of the rate the other lender will get you because you have already paid for an appraisal.

If you're still in the shopping mode do not pay for an appraisal or any other third party costs.

As Chris said someone of us believe in name recognition and referrals from our clients, there's nothing to gain by telling you what you want to hear.  

Also don't fall for the low cost/no cost loan game, the loan officers that offer you these programs are simply putting you in a higher interest rate loan resulting in a rebate from the lender they use to cover the cost of your loan.  

Good for you for doing your homework.  If there's anything I can do for you or any questions I can answer please feel free to contact me.
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May 15 2010
Most lenders will not accept an appraisal that was not ordered through their HVCC.

We underwrite loans for 12 major banks. If we need to go to another, your appraisal follows your loan. No need to get another one.

Although, no appraisal should  be ordered until the lender of choice is chosen. .... Happy funding, Rudi
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May 11 2010
Do not pay for an appraisal unless you're ok with possibly having to buy another if you choose to go with a different lender.  A very small percentage of lenders will accept one previously completed by another lender.  Not the first guy is not telling the truth, it will just limit your options.  There are still some loan officers in the business that will tell you what you want to hear but most of us realize name recognition is everything and will give it to you straight.  Don't commit to anyone until you're comfortable with them then it's almost best to stop asking around because every salesman will have a valid reason as to why you should work with them.  Too much info from too many will only make you wish you never started the process in the first place.  Good luck with your loan and take care.

Chris
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May 11 2010
Good morning!

The truth is that it is up to the lender whether they will accept an appraisal ordered by a different lender and not all do.  I am not aware of any direct/retail lender who accepts appraisals ordered by other lenders.

As far as I am aware, no law exists which allows homeowners to use one appraisal for multiple lenders or brokers. 

On my side, the wholesale side, I know of only 5 lenders out of 150 or so who will accept an appraisal ordered by another lender. 
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May 11 2010
More times than not, one lender will not accept an appraisal performed by another appraiser. There are cases but then a review appraisal is often required, costing you about the same as a 2nd appraisal.  And if it an appraisal for an FHA loan, this can open up another can of worms with the transfer of the case #,etc.  So do your shopping up front, and then commit with the lender you believe can deliver the terms they have placed in front of you.
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May 11 2010
 
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