Legal Question in Real Estate Law in Texas

I want to buy an old house wherein value of the land is $ 350,000 and am buying the house at $ 315,000 and asking for a mortgage of 252,000.

I believe that my appraiser is not honest. He appraises the property at 335,000 way below than the HCAD 405,000.

My Question is can a bank deny a mortgage even when Loan(252,000) to Value(335,000) is low saying that the house is not updated so the value is in land and so mortgage can not be processed ?

Rest all i.e my credit history etc is in perfect order to get mortgage.


Asked on 10/01/12, 3:32 pm

1 Answer from Attorneys
EDWARD KAZALEH KAZALEH & ASSOCIATES, LLP

Hello. Unfortunately your situation is more common than you think. Its pretty regularly seen now. Appraisers have a great deal of variation between them and they are required when making Federally insured Bank loans or Mortgages to use only actual sales of similar properties. It is not uncommon for them to come in below HCAD assessed (not Appraised) values. Also, Banks almost always hire the most conservative Appraisers, who come in way low about 90% of the time in my view. I suspect part of that may be that the Bank will likely make more fees of and be more easily capable of reselling for a larger margin, loans that are in reality well below 70% LTV ratio. Some banks are just much more conservative as well. Technically, if you are buying it at $315,000 THAT is the market value and WILL affect all future appraisals in the area. There is no one you can go after legally on this. You can put mroe down or go to another Bank.

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Answered on 10/07/12, 7:58 pm


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