Pushed appraisal - A pushed appraisal is an appraisal the home value has been falsely inflated in order to meet a value needed by the mortgage company to secure financing. There are many negative side affects of a pushed appraisal that can affect you for a long period of time.
Pushed appraisals can also lead to an increase in foreclosure rates which in turn tends to devalue other homes in the area, sometimes lender will not even lend in those areas if the rate gets too high..
Pushed appraisals have been an increasingly growing problem over the past decade or so. Many consumers have gotten into real financial trouble because there house's appraised value was inflated, and now they owe more on their mortgage than what their home is worth. Therefore, they are unable to sell their home because they can not get enough to pay off their mortgage.
The most widely publicized case of inflated appraisals involved Ameriquest Mortgage. Although they may have been the biggest culprit there are many smaller companies that have been found to participate in the same shenanigans.
Inflated values are often seen in illegal home flipping schemes. Although flipping a house for profit is perfectly legal, there are people who flip homes illegally using inflated values that decieve the lender into lending more money than the home is worth.
Inflated values or pushed appraisals also create problems when the borrower is trying to refinance.
The point of using an appraiser is for the lender to get an independent evaluation of their home. Most lenders have blacklists of appraisers they will not accept appraisals from. Be sure to ask your mortgage specialist to make sure the appraiser you're using is not blacklisted from your lender.
Appraisals are designed to protect lenders and homeowners alike from overextending themselves when taking out a home loan. When the appraisals are pushed, or inflated, borrowers can wind up owing more than their home's value, even if prices don't fall.
Consumers Right to Receive an Appraisal Report - You have the right to a copy of the appraisal report used in connection with your application for a mortgage loan. You must write to your lender or broker within 90 days of your application date to receive a copy of the appraisal for your home.
The appraisal will have a detailed analysis on the value of your home, as well as recent sales of comparable homes in the vicinity.
You have a right to receive a copy of your appraisal report. However its only a copy and the rights may belong to either the broker or the lender depending on who ordered it.
If you are having trouble receiving a copy of your appraisal report from the mortgage company, submit your request in writing and refer explicitly to your legal right to receive and their obligation to furnish this report.
For Borrowers: Remember if you switch mortgage companies mid stream the appraisal will have to be released to the other mortgage company by changing the orders' name on the appraisal. In most cases, the new mortgage company will have to fax over a new order and buy/sell and then the other company can recieve the previous appraisal from the appraiser.
There is often much confusion regarding the consumer's right to receive a copy of the appraisal report. Many borrowers mistakenly beleive that since they paid for the appraisal report that the report is theirs to do whatever they wish with it. Many beleive that it is an open document that they can use to shop around with different lenders. The fact is that even though the consumer has paid for it, the report was performed exclusively for the lender who ordered it and is the property of that lender. The borrower's right is only to receive a copy of the report. Any changes to the report or transfer of the lender will have to come with the approval of the original ordering lender.
It is your right to receive the appraisal that was done on your home whether you are purchasing or refinancing your home. Ask your mortgage consultant for more information on the appraisal.