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What Is A ï¿½ï¿½Property Valuation?ï¿½ï¿½
We applied for a mortgage and got the loan. During the application process the lender sent us the appraisal and a ï¿½ï¿½property valuation.ï¿½ï¿½ What is a property valuation and why did the lender send us a copy?
Francois (Frank) K. Gregoire, a former chairman of the Florida Real Estate Appraisal Board and now an appraiser and Realtor based in St. Petersburg, says that under the Dodd-Frank Wall Street Reform and Consumer Protection Act lenders must ï¿½ï¿½provide borrowers with copies of all valuations considered in making the lending decision.ï¿½ï¿½
The property appraisal plainly is a valuation used to make the lending decision. The ï¿½ï¿½property valuationï¿½ï¿½ is something different, but it could impact the lenderï¿½ï¿½s decision to accept or decline a loan application so it should be shared with the borrower.
Basically, a property valuation is an automated review of both the property and the appraisal, an effort to see if the appraisal meets certain standards. For instance, is the appraiser licensed? Is the appraised fair market price within a certain range expected through an automatic valuation? Are any of the comps too old or too far away from the subject property?
After electronically reviewing the appraisal the property valuation creates a list of potential issues, items in the appraisal that the lender might want to review. Such items are not necessarily evidence of something ï¿½ï¿½wrongï¿½ï¿½ but most likely items just outside the bounds of what was expected. Since all real estate is unique it follows that a few flagged items would not be surprising.
For more details speak with your lender. If you have received a one-page synopsis of the property valuation, ask for the entire report (if there is more). You are likely to be amazed at the thoroughness of the review. In one recent case the appraisal ran 27 pages and the property review – with far smaller pictures – was 22 pages in length.
Iï¿½ï¿½ve asked to see our homeownerï¿½ï¿½s associationï¿½ï¿½s master insurance policy to find out what coverage I have as a unit owner in case of disaster. They have sent the policy to me as a PDF, but it was too large to receive via my email provider. They also said I can register on the HOA site and download a copy, but that didnï¿½ï¿½t work either because the insurance documents were not uploaded. How do I get to see the HOA insurance policy?
The Board seems very open to providing a copy of the master policy, in fact they have tried in two ways. The problem lies in the growing use of electronic documents, especially for loan applications and closing documents.
Email providers may have a size limitation for attachments. You can get around this by using a specialized online service or site that specifically transfers large files. Or, bring a flash drive to the HOA office and ask if they will download it for you. Another idea is for the board to keep a printed copy of the insurance policy at the HOA office that anyone can simply read.
Peter G. Miller is the author of The Common-Sense Mortgage and a veteran real estate columnist. Have a question? Please write to email@example.com.View Foreclosure Article Archives
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