real-estate insurance
Home Appraisal Appeal
<p>We recently applied to have our PMI dropped, and the bank hired an appraiser to do an appraisal on our home. The comparisons they used were nothing like our home and were not in our subdivision, and the homes he did use to make their assessment were near a trailer park. We had our realtor do a market analysis for us and by his estimation, the home is worth $120,000 over what they quoted. We filed an appeal but were wondering what to do if they deny our request. Can I hire a real-estate lawyer and fight their appraised amount?</p>

<p>It is possible. Your basis for legal action would be the <a href="https://ncua.gov/regulation-supervision/manuals-guides/federal-consumer-financial-protection-guide/compliance-management/lending-regulations/homeowners-protection-act-pmi-cancellation-act" rel="nofollow noreferrer">Homeowner's Protection Act</a>, <a href="https://www.law.cornell.edu/uscode/text/12/chapter-49" rel="nofollow noreferrer">12 USC Ch. 49</a>, which requires removing the PMI requirement in circumstances that relate to the 80% interest threshold. The specific requirements are in <a href="https://www.law.cornell.edu/uscode/text/12/4902" rel="nofollow noreferrer">§4902</a>. One of the triggers is the <a href="https://www.law.cornell.edu/uscode/text/12/4901" rel="nofollow noreferrer">&quot;cancellation date&quot;</a>, which relates to the initial amortization schedule, basically the day when by making regular payments the loan is reduced to 80% of the initial value (not the loan amount). This completely ignores later appraisals, though the bank can require proof that the value of the property has not declined (and that evidence is &quot;of a type established in advance and made known to the mortgagor by the servicer promptly upon receipt of a request under paragraph (1))&quot;). The law excludes inflationary changes in equity, where e.g. one has an initial 5% interest that swells to a 20% interest over a few years because of inflation. Refinancing is always a legal option, but maybe not the ideal financial choice depending on interest rate differences and refinancing costs.</p>
<p>If this is about Canada, there may be different laws.</p>
