I do loan modification appraisals in Los Angeles, Orange and Ventura Counties.
Let’s begin with the basics. For homeowners facing an unaffordable hike in loan payments when an “ARM” is about to adjust, an appeal to the lender can result in the terms of the loan being modified. This has become an increasingly common way of keeping homeowners in their homes, thus avoiding short sales or even foreclosure.
A loan modification appraisal is mandatory before any financial institution will modify the terms of your loan. The current value of your property is one of the first things that bank will want to know.
The bank will usually issue what we call a “desk appraisal.” This is when the banker taps somebody on the shoulder in the office down the hall and asks, “What is this house worth?” The guy at that desk gives a number without ever having left his desk or visited your property, hence the term.
Many times, the homeowner is more aware of market conditions in his or her neighborhood than someone sitting at a desk a hundred (or a thousand) miles away. If you feel that the bank’s estimation of the value of your property is off base, then it would be to your advantage to have an appraiser actually visit and do a full loan modification appraisal.
A loan modification appraisal provides you with the opportunity to find out if the bank’s desk appraiser’s estimate is realistic. If there is a substantial difference in valuation, then you could employ this as a useful negotiating tactic. The conversation might go like this:
“Your desk appraiser said my house is worth $350,000, but I had an appraisal done this week. He actually came out to the property, checked the comparables and here is his report. He says it’s worth $310,000.”