Mortgage

Big Brother is double-checking appraisers, and that’s a good thing

'Value reviews' mine big data to protect mortgage borrowers, lenders

The centerpiece of every mortgage application is the appraisal. Lenders originate residential mortgages on the basis of either the sale price or the appraised value, whichever is lower. If the appraisal is too high, sellers worry that they should have asked for more money. Worse, if the appraisal is less than the agreed sale price, it can be a deal killer unless the seller is willing to take less or the buyer brings additional cash to closing. But what if the appraisal is wrong -- or at least a valuation you want to dispute? What if the comps don’t apply, the appraiser’s data is too old or the appraiser is not familiar with local trends? According to the National Association of Realtors, about 4 percent of all transactions fall through because of appraisal issues, roughly 200,000 sales per year. As a practical matter, appraisals are hard to change. Appraisers -- not without reason -- are likely to stand by their valuations. The options in the case of a disappointing valuation...

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