Citibiank Lawsuit Over Appraisal

Home appraisals were part of the culprit during the housing boom and are now being criticized for being too low, not allowing people to refinance and killing some sellers’ asking prices.

After the housing boom regulators imposed tough new rules not allowing banks from picking their own individual appraisers.

Has it helped?

I personally have not had too many issues with the new system.  Although I can add that the housing market is very local.  San Diego real estate can change from one street to another so if you take an appraiser from North County San Diego and put him in an area like North Park which is by far one of the areas we have here with the most numbers of pockets, you could be in the situation of my very patient buyers last year who waited two months to close while banks argued and new appraisals were ordered.

Appraisals that were $50,000.00 apart.  $50K  on $500,000.00.  That is a 10% difference with the second appraisal being higher.  More appreciation than anyone’s seen in San Diego for awhile, I’d say!

Homeowners have also sued J.P. Morgan Chase and Co, Wells Fargo and other big lenders claimingthat banks are misusing automated valuation models in order to cut home-equity lines of credit. 

Automated appraisals were pioneered by Yale economist Robert Shiller.  He argues that these appraisals are more objective than human appraisers but many are irate that in some situations the system is providing unrealistically low values, making lenders reject loan applications or lend less money in a housing market that is full of problems.

If you are curious about your home’s value in this market, we are here to help.  Email us at [email protected] and we will send you a free, customized, and confidential evaluation.