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What are our options when an appraisal is under asking price?

We were set to close on a house last Wednesday for the listing price of $73,900. The house was previously bought by a non-profit organization for $50,000 before the house made it to hud's public bidding market. The organization installed many upgrades including: tile floors, brand new carpet in bedrooms, granite countertops in kitchen/baths, tile backsplash in kitchen/baths, craftsman style cabinetry in kitchen/baths, brand new appliances, new paint/trim, has privacy fence. Basically, it was move in ready and had upgrades one would see in a much more expensive home. 3 weeks ago our loan officer said the appraisal was good for the asking price. The day before closing last week our loan officer tells us that the private mortgage insurer wants to do their own appraisal, now it's the day before closing again and we were informed pmi does not agree with the appraisal of the house. We have the only key to the house, so I assume they didnt even go by the house. We love this house and believe it is well worth the asking price. Does anyone have any advice or experience with this type of situation?
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August 27 2013 - Loganville
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I am an expert in fighting low appraisals and in the Atlanta market. I am both a certified appraiser and Realtor. I will need many more details in the transaction, but if you contact me I may be able to help. You can find my contact info here or look me up on Harry Norman's website.
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August 27 2013
Can you try to work with another lender? I hope you have a good buyer agent in your corner, so you are not out of contract.
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August 27 2013
I have never had this experience before.  Usually, if the appraisal report from the lender is good, then you should be fine closing escrow.  If the PMI insurer does not agree, then your lender should find another carrier that is willing to accept the appraisal value.
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August 27 2013
 
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