Inflated Appraisal - Sue Lender

[tsolomon]

Hi, after reviewing my appraisal for home I bought in Phx in 2006. I am sure it is inflated. The appraisal states home prices increasing but the the comparables listed show decreasing home prices starting in 2005. My home should never have been appraised at $350k. In 2006, from my estimates it should have been $300-$320k. Do I have chance to sue lender and have mortgage declared fraud and walk away from home or require modification to current price. Now average price ~$220k. I have heard stories of people suing for inflated appraisals. How difficult is this? Is this worth the money or should I just walk away? My loan is from Bank of America and they completed appraisal through HomeFocus Servies.

[Moe Bedard]

Hello and thanks for sharing your story!

The problem is that the legal remedies under state or federal law for appraisal fraud are basically non-existent and finding a lawyer to take your case on contingency will be very difficult.

Most likely you will only be able sue the appraiser and lender. Most likely you will have to pay for the lawsuit and this can be very spendy with no guarantees.

[Paul Molinaro Esq.]

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

Some say (and these are an important and influential some) that the appraisal of a home is done to protect the LENDER not the borrower. It is the lender who relies on the appraisal when deciding whether to take the risk of lending the money.

- Paul

[tsolomon]

Thanks for the reply. I thought it was a long shot. I saw an attorney who was trying to sell the idea. I thought I would get other input. As to who the aprraisal protects, check out this recent ruling I found online.

Appraisal Scoop: Arizona Court Rules Appraiser Owes Duty to Buyer/Borrower


Thanks
TS

[amicusman]

I think I just was banned

[iOwnSomeMNTA]

Hey I got one too!

Funny thing was my neighbor across the street was trying to sell her house what was the same time and same as mine and could not get a buyer.

My house at the time in 2005 was appraised @ $403,000 and she was trying to sell @ $380,000.


Amazing!

I'm giving my house back to the bank! Chapter 13

Today's home appraisal is $225,000 due to house in mid construction
First is $303,000
Second is $87,000

House same as mine but more Sq ft. Just sold for $250,000 was asking $265,000

[Paul Molinaro Esq.]

NO LEGAL ADVICE HERE - JUST GENERAL INFORMATION - ANY SIMILARITIES TO ANYONE'S ACTUAL SITUATION IS JUST ONE HECK OF A COINCIDENCE.

Hey, tsolomon, thanks for the link... that is a unique ruling... and I'd like to see it come to Calfiornia... funny about the comment that borrowers would not hire an independent appraiser... I hired my own appraiser before I bought a house once... that was before I was in real estate and before becoming an attorney... I just thought it was well worth my money to pay someone for a true value, not someone from the bank. It was money well spent, if for nothing else but a good night's sleep.

- Paul