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Sheri Conrad
4 months ago
Lender did not get two appraisals for flipped home. The second appraisal was done after closing and it was 24,000 less than the first appraisal, thus we were not able to negotiate another asking price. This also violates the 90 flip rule with FHA. The bank is claiming we refused a third appraisal which makes no sense. We have been asking for one for the past six months, and the bank ignored us until I reported them. I have written to consumer affairs who turned it over to FDIC and they said I have to file a complaint against the appraisers. Why is the bank allowed to get away with this?
 
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Best Expert Answer
Joe Wallace... Answered 301 more questions
4 months ago
If a lender ordered an appraisal and the loan closed, but it later turned out the appraisal was faulty, it seems to me that the fault would seem to lie with the appraiser. A second appraisal, after the fact, not ordered by the lender that turns out to be substantially different would seem to be evidence against the original appraiser. Not sure how the 90-day anti flipping rule comes into play here, but services of a legal expert in real estate law in your state might be a very good move.
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Sheri Conrad
4 months ago
The 90 day flip rule is if seller purchased the house and flipped it within 90 days and earned 20% more than what he paid for it, two appraisals have to be done. How is the lender not at fault for this? They did the first appraisal, closed and then realized a second one should have been done. It is a rule and regulation of FHA.
Joe Wallace
4 months ago
Was the new buyer on the flipped home purchasing with an FHA loan? Or did the seller purchase with an FHA loan and sell with a conventional mortgage? That wasn't stated in the original question.
Sheri Conrad
4 months ago
Yes the loan was purchased with an FHA loan. I just found out yesterday the loan is uninsured. Not sure what the seller had going on. He purchased the house for $50,000 and flipped it and sold it before the flip rule time frame so two appraisals were required from the FHA. The first appraisal came in at $144,000 and we put $10,000 down as to have some equity built. The second appraisal was not done until AFTER closing and it came in at $120,000. We have made numerous attempts to fix this with the bank and they put us off until I wrote to consumer affairs, who then passed it to the FDIC. The bank then tried to load the loan into conventional, crediting the FHA fees and such but did not get our approval and they did nothing to come to an agreement about the true value of the house. They just expected us to make payment to the conventional loan. We wouldn't agree to it for fear it would seal the deal as to the value of the house and we wanted to talk to a lawyer who advised us to keep paying on the FHA loan. I cannot wrap my head around the fact the lender was negligent, yet we are left paying the price.
Joe Wallace
4 months ago
Have you gotten any advice from anyone at the FHA on how to proceed with filing a complaint? You can contact them directly at 1-800 CALL FHA.
Sheri Conrad
4 months ago
I did write to HUD and they told me my FHA loan is uninsured.
Joe Wallace
4 months ago
There are a few exceptions to the FHA anti-flipping rules, which are as follows from HUD 4000.1: "Exceptions to time restrictions on resale are: -Properties acquired by an employer or relocation agency in connection with the relocation of an employee; -resales by HUD under its REO program; -sales by other U.S. government agencies of Single Family Properties pursuant to programs operated by these agencies; -sales of Properties by nonprofits approved to purchase HUD owned Single Family Properties at a discount with resale restrictions; -sales of Properties that are acquired by the seller by inheritance; -sales of Properties by state and federally-chartered financial institutions and Government-Sponsored Enterprises (GSE); -sales of Properties by local and state government agencies; and -sales of Properties within PDMDAs, only upon issuance of a notice of an exception from HUD."
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