LenderFi-Dispute-#3059043

LenderFi is disingenuous. It is well known that each lender requires an independent appraisal and that the appraisal my husband and I paid for (and which was rejected ) cannot be used by another lender. We have, in fact, paid for another appraisal for a new lender. That appraisal, received just today, set the value of the house at $435,000, EXACTLY the same value as the first appraisal done for LenderFi which was rejected THREE WEEKS AFTER the loan had been approved. I have been informed by another lender that the second appraisal required by LenderFi appeared to be overly conservative which is consistent with what David Fry telescoped he wanted/expected, i.e., a lower value. Rather than draw from a pool of appraisers as I believe is normally done, David Fry hand selected Alex Uminski. They both told me that they have friends in common. Both confirmed to me that Mr. Fry told Mr. Uminski what he didn't like about the first appraisal. There can be little doubt but that Mr. Uminski clearly understood that David Fry wanted/expected to see a lower value. The second appraisal was $45,000 less than the first appraisal and, since LenderFi, decided to rely solely on the second appraisal, LenderFi revoked its previous approval and offered to make the loan only upon less favorable terms. This house has consistently appraised well over $400,000, with an appraisal of $550,000 in 2008 and an appraisal of $445,000 just two years ago for an APPROVED loan with a major lender, and now two independent appraisals of $435,000 within weeks of each other. We believe that the first LenderFi appraisal was improperly rejected and even if the concerns were legitimate, that the second hand-picked appraiser deliberately suppressed the value of the house to make David Fry happy. In short, the appraisal we paid for was rejected and the second appraisal was not objective. We, therefore, believe we should be reimbursed for the cost. Also, the customer service was awful. We were given approval, misled into believing that the delay in getting loan docs was due to the press of business and not told that the first appraisal was questioned until a month or so after it was submitted, and three weeks after we were given loan approval. LenderFi, without having signed documents, notified our insurance company to change the mortgagee to LenderFi. I have requested that they fix this and they have agreed. However, I have had no confirmation that it's been done. If for no other reason, we should be reimbursed for the way in which this was so badly handled. LenderFi did not attempt to work with us. Despite my objection to the second appraisal, no one bothered to call us or discuss it. They simply sent a modified offer on less favorable terms, requesting additional origination fees and PMI. As a result of the way this was handled, interest rates have ticked up and instead of getting the 3.5% rate LenderFi had promised, the best rate at comparable pricing we can get is 3.875%.

Production of original appraisal; initial discussion with Ms. Camenisch

• The decision for a second appraisal hinged primarily on the original appraisal’s lack of analysis related to the subject’s site and neighborhood. The Camenisch/Dean house was one of the largest in the immediate neighborhood, a 2767 square foot house built on a typical-for-the-neighborhood 7000 square foot site. The sales used in the original appraisal were more similar to the subject in gross living area than those in the immediate neighborhood but their site areas ranged from 160-percent to 257-percent larger than the subject without discussion in the appraisal as to whether sales in the subject’s neighborhood were analyzed and why they were not used in the report. Review of the City of Richmond public property records for the subject and sales revealed a similar pattern: current assessment site values for the Sales used in the appraisal ranged from $73000 to $94000 while the subject’s site assessment was $45000. The City also showed that the front footage for the Sales’ sites were considerably larger than the subject’s site, ranging from 81 linear feet to 100 linear feet while the subject’s site was 50 linear feet, similar to those around it. These are indicators that the Sales analyzed in the appraisal were located in different neighborhoods. The original appraiser was asked to provide at least one sale, current or historic, on a site similar to the subject’s site. Further, if at least one current or historic sale was not available for analysis, the appraiser was asked to provide data and analysis to support the site adjustments applied in the appraisal. The appraiser was also asked to provide support for the upward condition adjustments applied to Sale One and Listing One (Sale Four in the report), not supported by data or commentary. The response did not directly address the questions but did respond that “many buyers in area prefer small lots to minimize lawn maintenance”. A second request was made for support which provided for analysis three recent sales found in the immediate neighborhood with sites ranging from 7744 square feet to 11659 square feet and gross living area ranging from 2459 square feet to 2483 square feet, with prices ranging between $312000 and $355000 and an average price of $330667. The response by the appraiser was “Based on my knowledge of the market area, my judgment and expertise in appraising in the general area, the best Comps were utilized in the report”. At this point, the decision was made that a second appraisal was needed.
• In discussing my concerns with Ms. Camenisch, at no time did I offer an opinion of value, a direction of value or a range of probable value. I made very clear to Ms. Camenisch that the need for the new appraisal was based on technical issues, not on the value but on how the value was being supported. In our initial discussion, Ms. Camenisch asked with I thought the property was worth, to which I replied that I did not know – a reason for the second appraisal. I was very clear with Ms. Camenisch that I was not concerned about the final value estimate but that the estimate be adequately supported.

Selection of appraiser for second appraisal

• To find an appraiser for the second appraisal, I went first to the Appraisal Institute’s website and searched for appraisers in close proximity to the subject. I was not concerned about the appraiser’s professional designation (I am not a member or associate member of the Appraisal Institute) so much as his/her experience in the local market. In my experience in appraisal fraud investigations, I had discovered that Appraisal Institute members frequently had solid training and experience and were well-versed at handling complex analyses. According to the AI roster, MG Miller Valuations in Richmond, VA was located within five miles of the subject property and had four individuals with the “SRA” designation, meaning they were residential appraisers (as opposed to other designations that are directed primarily at commercial or other types of valuation work). In the roster, Mr. Uminski was shown as the company’s “residential appraiser supervisor” so I selected him for first contact. The selection of the appraiser for the assignment was up to Mr. Uminski. He opted to complete the appraisal himself as he was familiar with the subject’s neighborhood.
• At no time was a specific value, range of value, direction of value or outcome for the appraisal discussed with Mr. Uminski of MG Miller Valuations. I was very specific in my discussion with him that I was NOT interested in any particular value outcome. Rather, I was interested in analysis that addressed location and site values in the subject’s neighborhood, as the original appraisal went to other neighborhoods with larger improvements and larger sites without providing analysis of sales or sites in the subject’s own neighborhood.

Following receipt of the new appraisal, Ms. Camenisch withdrew her loan application. At no time since the new appraisal was completed or since the filing of the PeopleClaim complaint has Ms. Camenisch provided alternative sales or other data that might lead to a different value conclusion.

LenderFi rejected an appraisal of $435,000. My house just appraised again, for another lender, for $435,000.

In its most recent response, LenderFi states: "Following receipt of the new appraisal, Ms. Camenisch withdrew her loan application. At no time since the new appraisal was completed or since the filing of the PeopleClaim complaint has Ms. Camenisch provided alternative sales or other data that might lead to a different value conclusion." This is misleading. When I received the second appraisal, I immediately (via email to all parties concerned, including the second appraiser) voiced my objections to the appraisal. I got no response from anyone and certainly no request to provide additional data to support the first appraisal. The only response I eventually got was presentation of a new loan proposal based on the much lower second appraisal that included additional fees and PMI. There was never any attempt to respond to my objections to the second appraisal, to discuss the matter with me, or to attempt to resolve the matter to mutual satisfaction. Instead, we were ignored except for a take-it-or-leave it loan offer on substantially worse terms. My husband and I were not interested in a loan on the newly proposed, worse terms and rejected the offer. And, at that point, the customer service had been so bad, we weren't interested in doing business with LenderFi at all.

When David Fry first told me (three weeks after our loan had been approved) that a second appraisal would be required, he said that the first appraiser refused twice to justify the value of $435,000. I just learned from LenderFi's most recent response to this claim that the appraiser did, in fact, attempt to justify the value set but LenderFi wasn't happy with her explanation. David Fry may (or may not) have specifically told Uminski that he expected a lower value but that he expected a lower value was very clear. David Fry told me that, in his opinion, the first appraiser had artificially forced the adjustments to come up with the value of $435,000. In other words, he thought the value was too high. He gave me no other specifics and at no point assured me that he was only interested in technical support for the value. Instead, they hired a new appraiser to do a whole new appraisal, an appraiser who (it turns out) has friends in common with David Fry and who understood Mr. Fry's issues with the first appraisal. Uminski told me that David Fry was "hung up" on lot size. It's no surprise that the second appraisal came in $45,000 lower than the first appraisal.

This whole thing has been badly handled by LenderFi. We were given approval and apparently LenderFi expected the loan to close on the original terms since it went forward with changing the mortagee on our insurance. When we inquired as to why we hadn't had loan docs when the loan had been approved, we were told "press of business" when, in fact, the appraisal was in question. We were misled. The approval was revoked three weeks later when David Fry decided he didn't like the first appraisal.

LenderFi did not act with due diligence. If they had, we would have been kept apprised of the situation from the get-go. Instead, we were given approval, misled about the delay, ignored, and ultimately presented with a take-it-or-leave-it loan proposal on substantially worse terms than were originally offered and approved.

While we appreciate that LenderFi paid for the second appraisal in what they say was an attempt to close the loan, that's not the issue. We, as potential borrowers, have no control over the appraisal process or who is chosen to do the appraisal. We are at the mercy of the lender and the appraiser. In this instance, we (a) question the need for the second appraisal (especially since the house has again appraised for $435,000 and the first appraiser did attempt to explain her valuation conclusion), and (b) believe the second appraisal was clearly not objective. We, therefore, strongly believe that we are entitled to a refund of the $400 we paid to have an honest appraisal done of our home. We got that in the form of the first appraisal which LenderFi rejected in favor of an appraisal that wasn't at all objective.