*Edit: title should have been Appraisal to remove PMI

We have been in our house 2 years now in December and having the loan be >2 years old and having the LTV <75% was a requirement by my lender to remove PMI. We have been paying close attention to what houses in our area (Pflugerville) and specific neighborhood have been going for and thought that we should easily be at 75% LTV at this point with the appreciation.

To hit <75% LTV we needed an appraisal of $290k or higher. I thought we would probably be in the area of $292 - $295k based on the comps I asked my real estate agent for a few months ago (Dec). We got the procedural paperwork in the mail from the lender, mailed them a check for 450 and waited a few months.

He comes out to appraise in April, and our appraisal comes back at $279k, which is about 11k short.

Two things:
They sent me an appeal form that I can fill out to try and appeal the appraisal. Do I need to dig up some more comps? Im thinking what might have happened is that there was too long of a time period that passed betwen filing the paperwork and the actual appraisal and the most recent sales were from the Dec time frame instead of the summer when more homes are selling and selling faster with multiple bids. Any advise on appealing here? It said I have 4 months to appeal.

-My property tax appraisal came in at $304k. I realize that the tax appraisal and actual market value appraisal are completely different things. Can I protest my property tax value down to $279k simply by walking in with this 3rd party appraisal? This would lower my tax liability by about 700-800 bucks, making the 450 that we just "lost" a little bit easier to swallow.

Usually the tax appraisals lag behind true market value so DEFINITELY protest that one to get it lowered.

Have your realtor look at your PMI appraisal to see what comps were used. That should tell you if the appraisal used the right comps and you can decide if an appeal is warranted.

Martin Q. Blank said:

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BadMoonRisin said:

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My property tax appraisal came in at $304k. I realize that the tax appraisal and actual market value appraisal are completely different things. Can I protest my property tax value down to $279k simply by walking in with this 3rd party appraisal?

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Absolutely. And your refinance rejection letter. CAD values trail market values, not the other way around.

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Meaning that if I had gotten my property appraised on January 1st, I probably would have had better luck?

Also, I am doing a lot of reading about PMI and a lot of things are stating that LTV just needs to be below 80%. Is the lender able to require me to be below that? 279k would have us at 79% LTV.

Quote:

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The Homeowners Protection Act of 1998 forces the lenders on nearly all loans to automatically eliminate the PMI when the principal balance of the loan equals 78 percent of the original loan amount. Acute homeowners can get off the hook a little earlier. The law stipulates that, upon request of the home owner, the PMI must be released when the principal amount reaches just 80 percent.


The Private Mortgage Insurance act took effect in July of 1999. It gives homeowners a number of rights.

1) Lenders have to give you a written statement explaining that you have PMI and when you'll be allowed to cancel it.
2) The lender must allow you to cancel PMI when your equity is 22% or more.
3) And you can ask for permission once your equity reaches 20%.

The new law only affects new mortgages funded after July, 1999, but Fannie Mae and Freddie Mac have said they will apply the new rules to the older loans.

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We would be right up against the 22% equity line. In that case I can just pay 2k to principal only and tell them to remove it, right?

I had a conversation last week with a PMI account rep who stated the above. 20% equity you need approval and 22% they are required to remove it.

Lots of misinformation at the mortgage servicing front line.

They are required to remove PMI when you reach 78% original LTV according to the original amortization schedule. I.e. you can't pay extra and have it removed automatically early. However, paying extra and getting it down to 80% does trigger the option of having you request removal and getting an appraisal or broker estimate.

I am currently in the same boat and just waiting for a good time this year to have someone come take a look at our place. The misinformation from the mortgage servicers are real. First time I called up they were trying to tell me some garbage about needing 75%. I had to dig out my original mortgage papers to back up my assumptions. Your original mortgage papers will probably also have the date that you are scheduled to reach 78%.

BadMoonRisin said:

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*Edit: title should have been Appraisal to remove PMI

We have been in our house 2 years now in December and having the loan be >2 years old and having the LTV <75% was a requirement by my lender to remove PMI. We have been paying close attention to what houses in our area (Pflugerville) and specific neighborhood have been going for and thought that we should easily be at 75% LTV at this point with the appreciation.

To hit <75% LTV we needed an appraisal of $290k or higher. I thought we would probably be in the area of $292 - $295k based on the comps I asked my real estate agent for a few months ago (Dec). We got the procedural paperwork in the mail from the lender, mailed them a check for 450 and waited a few months.

He comes out to appraise in April, and our appraisal comes back at $279k, which is about 11k short.

Two things:
They sent me an appeal form that I can fill out to try and appeal the appraisal. Do I need to dig up some more comps? Im thinking what might have happened is that there was too long of a time period that passed betwen filing the paperwork and the actual appraisal and the most recent sales were from the Dec time frame instead of the summer when more homes are selling and selling faster with multiple bids. Any advise on appealing here? It said I have 4 months to appeal.

-My property tax appraisal came in at $304k. I realize that the tax appraisal and actual market value appraisal are completely different things. Can I protest my property tax value down to $279k simply by walking in with this 3rd party appraisal? This would lower my tax liability by about 700-800 bucks, making the 450 that we just "lost" a little bit easier to swallow.

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You can do that, but don't expect the appraiser who did that report to provide any help since you weren't the client, you aren't the intended user, and the purpose of the report was for financing, not property tax valuation. In fact, don't be surprised if the CAD refuses to consider it.

I do not think I ever got an appraisal to be revised.

Here is the somewhat confusing guidelines for Fannie Mae originated loans: Dropping MI

Jay@AgsReward.com said:

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Here is the somewhat confusing guidelines for Fannie Mae originated loans: Dropping MI

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This is exactly what I was looking for.

HTownAg98 said:

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BadMoonRisin said:

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*Edit: title should have been Appraisal to remove PMI

We have been in our house 2 years now in December and having the loan be >2 years old and having the LTV <75% was a requirement by my lender to remove PMI. We have been paying close attention to what houses in our area (Pflugerville) and specific neighborhood have been going for and thought that we should easily be at 75% LTV at this point with the appreciation.

To hit <75% LTV we needed an appraisal of $290k or higher. I thought we would probably be in the area of $292 - $295k based on the comps I asked my real estate agent for a few months ago (Dec). We got the procedural paperwork in the mail from the lender, mailed them a check for 450 and waited a few months.

He comes out to appraise in April, and our appraisal comes back at $279k, which is about 11k short.

Two things:
They sent me an appeal form that I can fill out to try and appeal the appraisal. Do I need to dig up some more comps? Im thinking what might have happened is that there was too long of a time period that passed betwen filing the paperwork and the actual appraisal and the most recent sales were from the Dec time frame instead of the summer when more homes are selling and selling faster with multiple bids. Any advise on appealing here? It said I have 4 months to appeal.

-My property tax appraisal came in at $304k. I realize that the tax appraisal and actual market value appraisal are completely different things. Can I protest my property tax value down to $279k simply by walking in with this 3rd party appraisal? This would lower my tax liability by about 700-800 bucks, making the 450 that we just "lost" a little bit easier to swallow.

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You can do that, but don't expect the appraiser who did that report to provide any help since you weren't the client, you aren't the intended user, and the purpose of the report was for financing, not property tax valuation. In fact, don't be surprised if the CAD refuses to consider it.

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I understand about the appraiser not helping on the appeal, but the purpose of the appraisal was to find the market value. If a certified independent third party appraiser says that the market value of my home is X, why would Travis CAD reject it? Why is their "guess" about what my property value is better than someone who actually conducted an appraisal?

Market value is market value.

Market value is not market value.
First off, the very definition of market value may be different (some say "the most probable price," some say "the highest price" and while the difference may be minor, it can result in a different value). Second, there are likely different guidelines and rules that must be followed depending on who the client is, and that can impact the scope of work and thereby result in a different value. For example, a tax appeal appraisal will have restrictions on the date of sale of the comps, and a financing appraisal may require that all the comps come from the same neighborhood.
Market value is always going to be subject to the assignment conditions.

I think appraisers have been low balling refi's recently. Not that you or I can do anything about it, just my observation. I refi'd about a year ago and my appraisal came in almost 10% lower than I was expecting.

I did a refi last August. The appraisal came in ok, but the appraiser literally had NO idea what to use as comps. I don't know if he wasn't familiar with the area or what, but he literally stood in my kitchen, pulled up his MLS account, and let me pick the comps for him.

So, I would definitely scrutinize the comps your appraiser used. Don't know if you can successfully appeal (I have gotten an appraisal revised, but it was on a new build where the appraiser severely undervalued the lot). But, if the alternative is that you get your tax value lowered, that seems like a win.

My refi appraisal also came in significantly lower than expected, luckily it still appraised above the number we needed so it worked out in the end. We'd been considering listing our home before we refinanced, since then I've been wondering if the appraisal brought me back to reality compared to what I thought it would still for or if the appraiser cherry picked some of the worst comps (none of them were nearly as nice as our house, but I'm guessing everyone says that).

I am about to be in this same boat to remove my PMI. Im up in round rock area which is close to yours. All this info is greatly appreciated

HTownAg98 said:

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Market value is not market value.
First off, the very definition of market value may be different (some say "the most probable price," some say "the highest price" and while the difference may be minor, it can result in a different value). Second, there are likely different guidelines and rules that must be followed depending on who the client is, and that can impact the scope of work and thereby result in a different value. For example, a tax appeal appraisal will have restrictions on the date of sale of the comps, and a financing appraisal may require that all the comps come from the same neighborhood.
Market value is always going to be subject to the assignment conditions.

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Point taken, thanks for this.

According to the appraisal done, all sales data was obtained from 1/1/2017 and the appraisal date of 4/14/2017 when the appraisal was done. I would think that this would give me at least a little bargaining with the CAD so that I can lower my market value to somewhere lower than 304k, hopefully as close to 279k as I can get. It would be similar to finding comps myself after getting my paperwork, I would think.

I also looked at the appraisal appeal process and the conditions are that the sales are no more than 1 year from effective date of appraisal, that they are similar Gross Living Area, age, ammeneties, finishes, etc, and that they are no further outside of the scope of the original sales. The original appraisal had an extremely tight focus, so I think I need to find comps within my own little "section" of my neighborhood.

I did find some sales from in the summer where price/sq ft are higher (they usually result in multiple offer situations then -- which my original comps didnt really represent) and was able to put some comps together. I am going to submit the appeal, but have low confidence level, maybe 20% of getting where I need. If I can get within 3-4k Ill just pay down and remove the PMI, although I am a little hesitant since I just had a newborn a month ago and would rather put that towards college savings. I'll wait and see. We might just wait another 6 mo to a year and see where values go. Our area is growing at an insane rate so waiting a year wouldn't be the worst thing.

Will update with results if anyone is interested. Thanks for all of the advice.

I'd like to know how it turns out, please update when you have an update

TXTransplant said:

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I did a refi last August. The appraisal came in ok, but the appraiser literally had NO idea what to use as comps. I don't know if he wasn't familiar with the area or what, but he literally stood in my kitchen, pulled up his MLS account, and let me pick the comps for him.

So, I would definitely scrutinize the comps your appraiser used. Don't know if you can successfully appeal (I have gotten an appraisal revised, but it was on a new build where the appraiser severely undervalued the lot). But, if the alternative is that you get your tax value lowered, that seems like a win.

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Not an apprasier but this seems highly illegal

Rustys-Beef-o-Reeno said:

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TXTransplant said:

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I did a refi last August. The appraisal came in ok, but the appraiser literally had NO idea what to use as comps. I don't know if he wasn't familiar with the area or what, but he literally stood in my kitchen, pulled up his MLS account, and let me pick the comps for him.

So, I would definitely scrutinize the comps your appraiser used. Don't know if you can successfully appeal (I have gotten an appraisal revised, but it was on a new build where the appraiser severely undervalued the lot). But, if the alternative is that you get your tax value lowered, that seems like a win.

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Not an apprasier but this seems highly illegal

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I thought it was very strange, but he was adamant (as he should have been) that he needed specific comps. My house is technically a two bedroom with a study, and he said at least one of the comps had to be the same. He didn't know where to look to find them, so I started giving him street names where I knew some others had been built (they are spread out all over a very large subdivision). He didn't end up using all of my suggestions, but I'm not sure he would have found what he needed to complete the report if he hadn't asked for my help.

I get that he wanted to get the correct comps.
However him asking you to pick them is not correct nor professional. If he didn't know he should inquire someone at his firm or recuse himself from the appraisal and defer to someone else.

It sounds like he didn't ask for specific comps, but where to find them. Nothing wrong with that.

HTownAg98 said:

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It sounds like he didn't ask for specific comps, but where to find them. Nothing wrong with that.

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I saw the comps that he pulled up, after I told him where to look. We discussed them, but I didn't know exactly which ones he used until I saw the final report.

He probably shouldn't have discussed the comps with you, but in the grand scheme of things, it isn't worth getting worked up about.

I successfully protested the property tax appraisal down to $279k with Travis CAD using the PMI appraisal. No word back yet from the lender about protesting that appraisal value using new comps. Will have to follow up, I've just been really busy lately...

Occasionally you arrive at a property and find that it is different than expected. For example, today I pulled up to a 1,600 sf house that has been updated only to find out that it is a metal building. Thanks for the heads up on the initial call when the appointment was made. The comparables that I researched and had with me were no good.

The same thing could happen with a two-bedroom. He would need a similar comp and it's better to find one while on site than making a second trip. That being said, this software is not complicated. Search for two bedroom homes in the subdivision, pick a few, and get photos while in the neighborhood.

Regarding the rebuttal, if there are comps that are better comps that sold in the right time frame, write them up and send them in. The worst thing that can happen is that he will say no. Make sure they don't have something significant different about them that is making the sale price higher, like a guest quarters, pool, workshop, substantial updating, etc.

Say something like this. Please consider this comp as it closed in the last 90 days, is the same age, in the same subdivision and is MORE similar in gross living area than comps #2 and #3.

Do that for the best 2 or 3 comps that you think support your case.

Also, look for any inconsistencies in the report. All living area adjustments should use the same $/sf. Check the math on all of them. Make sure the +/- symbols are correct. If the subject (your house) is superior in the area, the adjustment should be "+". If the subject is inferior, the sign should be "-". For example, if your lot is 7,500 sf and the comp is 5,000 sf the adjustment should be "+" (if an adjustment was made). If your house is smaller than the comp, the adjustment should be "-".

Also, look for consistency. If he is adjusting for age or condition, make sure all of the comps are treated similarly. If one house is 8 years old and adjusted for age, other 8 year old homes should also be adjusted for age.

Write up anything significant with the request to consider better comps. I would also include the county's assessment. You might even use the comps that the county used if you have access to them. Look at them to make sure they are good comps.

You could say something like, "The county assessed my property at $300K based on these comps. 2 of them closed in the last 90 days and all of them are more similar in gross living area to the subject than comp #3 from your report.

Some appraisers do consider these rebuttals when they are logical and done properly. Don't try to use listings that haven't closed or ones that closed AFTER the effective date. You can find the effective date on the signature page.

Hopefully this helps. Best of luck.

Sort of a follow-on, but how is condition taken into account when the house in question is in an older neighborhood. Would someone with a completely redone house, built well with higher end fixtures and whatnot be compared to one that was last remodeled in the late '70s or in original 1950s setup?

aggie appraiser said:

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Occasionally you arrive at a property and find that it is different than expected. For example, today I pulled up to a 1,600 sf house that has been updated only to find out that it is a metal building. Thanks for the heads up on the initial call when the appointment was made. The comparables that I researched and had with me were no good.

The same thing could happen with a two-bedroom. He would need a similar comp and it's better to find one while on site than making a second trip. That being said, this software is not complicated. Search for two bedroom homes in the subdivision, pick a few, and get photos while in the neighborhood.

Regarding the rebuttal, if there are comps that are better comps that sold in the right time frame, write them up and send them in. The worst thing that can happen is that he will say no. Make sure they don't have something significant different about them that is making the sale price higher, like a guest quarters, pool, workshop, substantial updating, etc.

Say something like this. Please consider this comp as it closed in the last 90 days, is the same age, in the same subdivision and is MORE similar in gross living area than comps #2 and #3.

Do that for the best 2 or 3 comps that you think support your case.

Also, look for any inconsistencies in the report. All living area adjustments should use the same $/sf. Check the math on all of them. Make sure the +/- symbols are correct. If the subject (your house) is superior in the area, the adjustment should be "+". If the subject is inferior, the sign should be "-". For example, if your lot is 7,500 sf and the comp is 5,000 sf the adjustment should be "+" (if an adjustment was made). If your house is smaller than the comp, the adjustment should be "-".

Also, look for consistency. If he is adjusting for age or condition, make sure all of the comps are treated similarly. If one house is 8 years old and adjusted for age, other 8 year old homes should also be adjusted for age.

Write up anything significant with the request to consider better comps. I would also include the county's assessment. You might even use the comps that the county used if you have access to them. Look at them to make sure they are good comps.

You could say something like, "The county assessed my property at $300K based on these comps. 2 of them closed in the last 90 days and all of them are more similar in gross living area to the subject than comp #3 from your report.

Some appraisers do consider these rebuttals when they are logical and done properly. Don't try to use listings that haven't closed or ones that closed AFTER the effective date. You can find the effective date on the signature page.

Hopefully this helps. Best of luck.

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So do the appraisers job for them?

This isn't intended to be a shot at you, but if someone did/does exactly what you suggest, and comes out "successful", what should happen? Should the person be refunded their money? Should the appraiser be reprimanded? Where are the accountable measures in place to ensure an appraiser isn't just being lazy or is just bad at their job?

Again, not a shot at you personally, end rant.

Quote:

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Sort of a follow-on, but how is condition taken into account when the house in question is in an older neighborhood. Would someone with a completely redone house, built well with higher end fixtures and whatnot be compared to one that was last remodeled in the late '70s or in original 1950s setup?

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Ideally, you would find some comparable sales with a similar level of updating. For example, if you have extensive updating, you would try to find a comp with similar updating so there is no adjustment. Sometimes, you have to expand your search area somewhat to find a comp that is similar. Then you would probably look at comps with some updating, but not extensive. If they were coming in $5,000 lower than the other comp (after all other adjustments), you would make a 3-5K upward adjustment so that they would be somewhat lined up with the best comp. You wouldn't want to use an adjustment that pushed them past the comp that is most similar. If there were multiple comps with lower level updating, you could use an adjustment that would place them slightly above and below the best comp so that the best comp is in the upper end of the range.

fourth deck said:

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They are required to remove PMI when you reach 78% original LTV according to the original amortization schedule. I.e. you can't pay extra and have it removed automatically early. However, paying extra and getting it down to 80% does trigger the option of having you request removal and getting an appraisal or broker estimate.

I am currently in the same boat and just waiting for a good time this year to have someone come take a look at our place. The misinformation from the mortgage servicers are real. First time I called up they were trying to tell me some garbage about needing 75%. I had to dig out my original mortgage papers to back up my assumptions. Your original mortgage papers will probably also have the date that you are scheduled to reach 78%.

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Be careful and make sure you get accurate information and understand the terms. I just went through this based on what a Wells Fargo Rep told me and wasted $500.

For us, we had to reach 78% LTV for them to automatically drop the PMI. However, this LTV target is only valid on the original LTV when the house was purchased and appraised, not a current LTV with new appraisal.

If you want to use a new appraisal's LTV, the new threshold drops to 75%. This meant that my new LTV of 79% with the new appraisal still doesn't meet their requirements to drop PMI. I can pay down to hit 80% of original appraised value, but can't use the new appraisal to say I now am at 80%.

Sucks I lost $500, but lesson learned for me. Make sure you check and recheck!

_lefraud_ said:

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So do the appraisers job for them?

This isn't intended to be a shot at you, but if someone did/does exactly what you suggest, and comes out "successful", what should happen? Should the person be refunded their money? Should the appraiser be reprimanded? Where are the accountable measures in place to ensure an appraiser isn't just being lazy or is just bad at their job?

Again, not a shot at you personally, end rant.

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The appraiser did the job. He just didn't come up with the desired number. This isn't an exact science. Give him ample reason to reconsider the value.

To answer your question "what should happen?". The PMI gets dropped. This is an opinion. There is not one right answer. A bridge didn't collapse here. There is nothing to reprimand unless there was something negligent or intentionally misleading. The accountability is that the appraiser is dropped off of the panel if they consistently do bad work. Failing to give you the opinion you want isn't necessarily bad work.

You mentioned researching comps prior to the property inspection in your other post. Why would you do that? Shouldn't you know what type data you're looking for first?

jja79 said:

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You mentioned researching comps prior to the property inspection in your other post. Why would you do that? Shouldn't you know what type data you're looking for first?

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You research and pull comps prior to going to the property because you don't want to make multiple trips. Most times you can get a good idea from the tax records or a prior listing, or even a current listing. A 2,000 sf house in a subdivision should be easy to find comps. Sometimes they add a pool and don't think to let you know, so you have to go find some comps with pools. In the earlier example, the tax records said the house was 1,600 sf and on an acre. The owner said the house was updated, but didn't mention that it was a metal building. If I had known that information, I could find comps before I inspected the property. Of course, I will normally print a range of comps and use the best ones after I have been able to put my eyeballs on the property.

aggie appraiser said:

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jja79 said:

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You mentioned researching comps prior to the property inspection in your other post. Why would you do that? Shouldn't you know what type data you're looking for first?

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You research and pull comps prior to going to the property because you don't want to make multiple trips.

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What does this mean?