You’ve heard of a “drive by appraisal,” right? One where the appraiser is a little busy that day, drives by the outside of the property, then checks on Zillow for some ideas about what the inside might look like.
Especially in condos, or condo-conversions. They all look alike after a while – right? And appraisers get paid a mere pittance nowadays – after all. Heck, sometimes, the lender doesn’t even need a “formal” appraisal. A BPO might work just as well.
So one day, Wells Chase of America called Abby Agent and asked her to do just that, for a condo property on Maple Lane, 1234 Maple Lane, in fact. The problem was that Abby went to 1234 Maple Street – where there was this newer townhouse development.
Condo, townhouse, Maple Lane, Maple Street – they’re close enough, right? In fact, these two properties were next to each other.
Oh, and a couple of other differences … the Maple Street townhouse was 4 bedrooms and a den, not the two bedroom (no den) at the Maple Lane condos. And Maple Lane was about 3,000 square feet smaller.
When the borrower got the “cash out” re-fi (for an extra 120,000) she was ecstatic. And spent it. Then couldn’t pay it back.
Wells Chase of America was NOT happy when it went to foreclose. Neither was Abby’s E&O carrier, when it wrote the check.