I am sorry this is so frustrating. You did everything right, and people around you let you down. We had something similar happen at the last minute, because the insurance, which I had completely secured, basically said no right at closing. Her associates had done the deal, it was all good, but she had some personal issue with respect to our parcel and when it came across her desk for the final signature she said no, and even was super abusive about it. As if whatever her problem was was our fault.
Re the homelessness: this has also happened to me before and it feels like crap but it’s not that uncommon. There are extended stay places, or even a hotel may work for a short term, depending upon the specifics. Maybe a friend needs housesitting. I hope you can find a good solution to both problems quickly.
You can, but IME it won’t be productive. Particularly if two appraisers have already given the same reply. Due to federal regulation on the separation/impartiality of appraisers and lenders, there is minimal competition between appraisers and they are all subject to the same regulated guidelines for the same products (appraisal type) in the same areas. Finding and securing a loan product not contingent on a residential appraisal seems to be a more likely candidate.
I’m so sorry that you experienced that, especially the abuse!! That’s just awful. What did you end up doing?
I’m trying to keep my chin up, there are just so many moving parts to all of this. Luckily I do have great friends (and awesome people on COTH) rooting for us and helping with advice and good stories.
They might not be the NO people, but they ought to have an understanding about the product they are selling. If it is something that no underwriter is going to approve, they shouldn’t be offering it. In our case the lender does not provide loans for our type of property and that should not have been a surprise to the loan officer. To drag people out for weeks/months into a process and tell them everything is good only to pull the rug out at the last minute is pretty crappy business IMO.
It’s interesting that the appraiser could not do the “commercial” aspect. When we bought this place the appraisal process was extensive. The appraiser provided 3 values, one cost approach, one as a boarding stable (including potential income stream) and one as just a residence with comps in the area. They included an analysis of the crop land as well. The final value was a combination of the three. I had never seen such an extensive appraisal of a property, even our other farm. This was the appraiser working with Farm Credit. I think they know what they are doing!
I, too, am pretty surprised that the answer is “we can’t do the appraisal” vs “here are the ways it appraises it and the value”. Since the appraisal has been paid for, twice, it seems that would be the appropriate thing to do. That’s the part of the appraisal deal that I am struggling to get over.
I think this lender may also have underestimated what a cranky country gal would say about this whole thing. In my world, your word is pretty important, as is your name. And in a digitally connected world, this is a major screwup. Not one I’m likely to forget easily.
if State, there will be an State oversight commission where you can file a complaint… and believe me state charter banks really do not want to deal with explaining what occurred to bunch of noisy commissioners. When I worked in banking at state chartered bank we were periodically checked for compliance. If State Chartered just for an internet search for your state to find the proper oversight committee’s complaint division.
Weeeellll, what does your conditional approval letter say re the appraisal? The common verbiage goes something like “subject to satisfactory appraisal to be reviewed prior to settlement”. If, big if, this is one of the conforming conventional residential loan products a satisfactory appraisal must be on a certain kind of appraisal form. That dictates that the appraisal ordered will be that kind of appraisal. If the property doesn’t meet criteria for that kind of appraisal then the appraiser can’t do the appraisal. The appraiser, being an independent third party, controls his fees. The lender does not control the appraiser’s fee schedule or how the appraiser does or does not issue refunds.
The appraiser doesn’t just issue random appraisal types bc that is what is applicable to the property. An appraiser may or may not be certified or authorized to issue other types of appraisals. If a commercial appraisal is needed then that’s what needs to be ordered, but if the loan product calls for a residential appraisal then a commercial appraisal is useless and won’t be ordered by a lender trying to close a residential loan product.
I’d certainly ask regarding a refund for at least part of the money paid. What I see is that if a value is not able to be issued then the appraiser will keep a “trip” charge and refund the remainder. I see full appraisal costs between 450 and 950 for conforming conventional residential loans. Trip charges between 150 and 250
Better to focus on something like a Farm Bureau loan as another poster mentioned;
Right - but they COULD provide a correct appraisal for the home and small acreage around it, which is one parcel. The only address provided was for the house, not the barn, which is a separate address (though joined for tax purposes, apparently).
Keep in mind, the area is zoned residential, the property is residential, and the only thing that ticks it into being commercial is a sign made from old horse shoes that identifies the property as a stables. On the MLS it was listed as being eligible for a conventional loan. When you look at the area around it, there are similar houses going for the sale price.
What’s really frustrating in this whole process is that I don’t believe the LO has been honest with us from the beginning. We were totally up front about what we wanted, what we expected the property to be, and what we needed. The only time I’ve remotely gotten pushy was when this malarkey started, and really it was only shock that we were at this stage (two weeks ago) and we still didn’t have a rate lock in. The LO did not indicate that they could not do this type of loan until this past FRIDAY…4 days before closing.
It is a large federal mortgage broker that was pushed on us by the realtor because she had success in the past. I will be filing a complaint after this is all said and done because I believe this LO was also pushing us to commit mortgage fraud based on some of the LOE he was trying to get us to write that we did not end up writing in the way he suggested.
I’m waiting for the farm guy, have provided all of our documents, and can’t do a damn thing until he gives us a provisional yes if he will do so. But since I’m at T -2 days to complete and utter homelessness for both hubby, myself AND my horses I can’t help but explore every option possible, being as creative as humanly possible and hope that something works. This is now occupying every single moment of my time…as facing homelessness does generally speaking.
Not if the appraisal was ordered for both parcels. I know it must be very frustrating, but there are a boatload of federal regulations that govern these transactions. The appraiser can only do whatever services were ordered. Nothing more nothing less. If the appraiser(s) say the property is not eligible for the type of residential appraisal ordered then that holds far more weight than whatever words were put in the for sale ad. And the lender for sure isn’t going to accept anything less than appraisals on all parcels securing their loan.
I’m far more offended that your lender didn’t adequately prepare you for the possibility of this outcome. I have a whole “speech” regarding the appraisal that I give my clients that covers the most common obstacles to a satisfactory appraisal and any items specific to their loan. To be unable to obtain a satisfactory appraisal at the 11th hour due to what I would call “red flags” that were clearly visible from the get go is terrible.
And to be clear - we started this process in March. It’s now May. Two calendar months have gone by, with no indication there would be a problem. A few minor hoops to jump through in underwriting which are always there, this is not the first property we’ve bought, it’s just the first of this type.
In this state, they set a closing date when they write the contract. I think this is pretty backward, but there you are.
My parents bought a farmette in a rural area on a conventional loan, and a property in the woods that also had a stable on it with a conventional loan. We had ZERO indication that this was going to be a problem until Friday. None. In fact, when they ordered the second appraiser to come out, they indicated that it was a dereliction of duty on the part of appraiser #1. So we thought “ok, this is all good”.
They didn’t give us ANY indication, not just adequate indication. Zero indication. Everything was “going well” until all of a sudden it wasn’t. If we’d have had any indication, we might have set a longer date with the buyers of our home for us to be out of it. Or we might have insisted that our home sale be contingent on the purchase going through. Or any number of things. But instead we kept getting the “everything is going smoothly” speech.
You’ll have to pardon me, I’m a bit all over the place, and definitely venting. I spent 2am - 5am once again googling and trying to figure out where we went wrong, and what we can do about it at this stage.
Ahhh - sorry - I guess I wasn’t clear that I had suggested that we just get the loan on one of the parcels to the LO who was “working with his management” and was waiting to hear back as to whether they could modify things that way. Since the appraiser has already been out, I was hoping he could complete the appraisal with the residential form for the home itself and that parcel (rather than waiting for appraisal #3 visit). Then the second parcel would go commercial.
It would start the loan process over…again…but at least we could have a place to sleep.
A serious accusation to be sure and certainly possible.
IME I request random LOXs when I know a loan isn’t viable but my client is not accepting my gentle hints. Far easier for me to present the info to UW with the LOXs.
I’m surprised a mortgage broker hasn’t offered you other loan product options. Usually a broker has access to a greater array of products than a LO working with a singular lender.
Understanding this is a nuclear option could you just walk away? From both your farm purchase and your house sale? I’d surmise your purchase was contingent in the loan, which you don’t have, so likely no penalty to walk. You might have to offer some form of payment of damages to the purchaser of your house (loan fee, appraisal fee) but it might be worth it? For your sanity?
In hindsight, it is clear that they were having problems in two areas, but I was never told that there were any (if that makes any sense). For instance, when I was frustrated that we didn’t have a lock, the LO started to say “how important is this property to you” which at the time was just a baffling statement since we were two weeks before closing. Then just day or two before the implosion one of the letters that we were pushed to write and sign was that we had no intention of making the facility a boarding facility and only intended to keep our personal horses on it. We were completely baffled, as we had even gotten our insurance rider with the inclusion of a boarding facility back in March. That would certainly make it look like WE were trying to commit mortgage fraud had we secured the loan in it’s original incarnation.
It’s not unexpected to us that we’d have to have some LOX, our financial situation is a bit complex as both of us work full time with considerable income, I have additional income from a business that I own, and we own a property in another state that we have rented to some family members (not bought as income producing, it was our primary residence prior to moving to this state). I figured that would cause some questions, as random amounts of money do show up in our account fairly frequently. Again, we were up front about all of those things including how the residence came to be rented, why we didn’t sell it, what the businesses were, and what the side gig money is.
For instance, a flag for them was that we hadn’t claimed any rental income in 2019’s taxes, but that’s because at the time, we were not charging rent for the home since those family members were really struggling and there was an additional situation that made it a win/win for them to live there. Then in 2020, as their situation improved, they began to pay rent, working their way up to 2021 where they can now pay the full rental amount. While this is certainly unusual in some areas, it’s not in ours, where adults frequently do this for their kids while they are in college, and I can show the payments where they started to pay. I can show emails and Facebook messenger conversations that prove that was the case too, but what I can’t show is a formal rental agreement stating that because we didn’t do one…because it was family. I can explain that in a LOX though, and did. But again I was upfront about all of that when we had those conversations early in the process, and the only thing that the LO said was that “we might need a formal lease agreement” which we then did create and execute (but not backdated because that WOULD look like fraud).
So nothing stuck out as a real issue to me, no. Not until the very end when they started to have trouble with the property itself. I looked on their website last night and it appears that they do Fixed, Conventional, and FHA/VA types of loans. No commercial or ag, and they are insisting it has to be one of those.
Unfortunately we’ve already closed on our house at the beginning of the month. It’s no longer ours. They’ve allowed us to live here until our purchase goes through. No option really.
And staying on top of everyone!