Change in appraisals causing uproarOctober 21, 2009
Submitted by Sam Bayne, Founding Partner, REALTOR®.
By Russell Grantham The Atlanta Journal-Constitution
Homeowners who have watched nervously as the economy has eroded the value of their homes may have another reason to fret: a change in the real estate appraisal system that critics say is driving values down and disrupting the housing market.
Appraisers, mortgage brokers and others blame the new rules, which change how appraisers are assigned, for lost revenues, delayed and faulty appraisals, collapsed deals and other problems, even in some of Atlanta’s toniest neighborhoods.
Atlanta mortgage broker Steven Alexander of National Guaranty Mortgage Corp. said an out-of-town appraiser hired to evaluate a Buckhead mansion he handled recently came up with a value $500,000 below the $2.1 million he thought the house deserved.
He said the appraiser ignored the fact that the home was designed by a well-known architect, was located in a more desirable school district than comparison homes, and included luxurious features such as copper gutters, a patio fireplace and a basement entertainment center.
As a result, the owners, who were refinancing, ended up having to get a loan with a higher interest rate because the lower appraisal made the loan appear riskier, Alexander said.
For the entire story on the AJC, please click here to read about changes in home appraisals.