Peoples National Bank is committed to providing mortgage customers with a straightforward method to submit concerns about an appraisal completed during the loan application process. If you believe your appraisal is deficient, we strongly encourage you to submit an ROV request to help us ensure that your appraisal report accurately reflects the value of the property.
WHAT IS AN APPRAISAL?
An appraisal is completed by a licensed real estate appraiser who provides an impartial estimate of how much a property is worth at a given point-in-time. Appraisals compare the subject property to other comparable properties in the market that have recently sold (“comparable sales”) to develop a “fair market value.” Lenders require an appraisal to ensure the collateral used to finance the mortgage loan for your loan has sufficient value to support the requested loan amount.
WHAT IS A RECONSIDERATION OF VALUE?
An ROV is a request for the appraiser to reassess the appraisal report using additional information provided by the borrower that may impact the initial value conclusion. You may consider initiating an ROV request if, after reviewing the appraisal, you believe one or more of the following has occurred:
- Report contains factual errors or other errors or omissions.
- Property characteristics, or other information about the property has been incorrectly reported or not previously considered, which may affect the value conclusion.
- The comparable sales selected are not the most suitable for the property comparisons and additional comparable sales can be provided for consideration.
- Provide evidence that the appraisal was influenced by prohibited bias or discrimination
Keep in mind, just because your appraised value came in lower than you expected, this doesn’t necessarily mean your appraisal is flawed or that another appraisal would yield a higher appraised value. Appraisal reports capture the appraiser’s opinion of value in a snapshot in time, meaning an appraisal report performed six months ago or six months in the future may very well produced a different opinion of value. If the appraiser does not adjust the value this also doesn’t necessarily mean the appraiser is wrong – the appraiser is required to meet the standards provided under USPAP which may limit their ability to consider certain facts or information you provide.
HOW THE ROV PROCESS WORKS
Initiating the ROV Process
- Download the ROV Request Form (pdf)
- Complete the ROV Request Form on your own or consult with a real estate agent for their input as to which comparable properties or other relevant information may be beneficial to include with your request. Even if your real estate agent or loan officer does not believe that submitting an ROV request will result in a change in the value conclusion, you are still entitled to do so.
- For clarifications or corrections unrelated to the value conclusion, please submit these requests to your loan officer via email.
- Submit the completed and signed ROV Request Form (pdf) via email to [email protected]. Peoples National Bank will confirm receipt of the ROV Request Form.
After Submission
- Before communication is sent to the appraiser, an underwriter will review the completed ROV Request Form to ensure it is completed correctly, provides sufficient information for the appraiser to consider, and does not contain prohibited information.
- If these requirements are not met, a Peoples National Bank staff member will work with you to remediate any issues.
- Once the ROV request has been submitted to the appraiser, the appraiser will evaluate all provided information and consider the validity of the ROV request. The appraiser will provide a revised report, regardless of the outcome, with a detailed response to the ROV request. The response will summarize their analysis of the information provided, state if any changes were made and if a change of value has occurred.
- Note: The appraiser is an independent valuation professional who will determine if the appraisal report warrants a change in value and cannot be directed by you or Peoples National Bank to change the appraisal.
- The results of the ROV request will be communicated to you via email. A copy of the revised appraisal report will be delivered to the applicant(s) in compliance with regulatory guidelines.
Note: ROV request timelines may vary. In most cases, ROV results should be provided within 7-10 business days following the receipt of the ROV request.
ROV GUIDELINES
Borrowers must submit a completed ROV Request Form that includes the purpose of the request, detailed explanation/reasoning, in addition to specific and verifiable information that may not have been available or considered when the initial valuation was performed which support the basis for the reconsideration request.
- For any appraisal, only one borrower-initiated ROV is permitted.
- There is no cost associated with the ROV Request
- The ROV must be submitted by the borrower to the lender before loan closing.
- After a loan has closed, an ROV request is no longer allowed to be submitted by the borrower for that appraisal.
- Please be as detailed as possible in providing information for the appraiser to consider. If you are working with a real estate agent, they may be able to provide you with comparable sales in the market.
- If this is a refinance transaction, you may use tools like Redfin and Zillow to find recent sales activity – but keep in mind, contingent sales and listings cannot be used. Also, property must have been assigned an APN or MLS #. In most cases, you can perform an online search using the property address & “MLS #” to find this value.
- For factual errors, please provide which data points are inaccurate (number of bedrooms, number of bathrooms, GLA errors, age of home errors, presence or absence of a fireplace, parking garage, swimming pool, etc.).
APPRAISER INDEPENDENCE REQUIREMENTS
The Appraiser Independence Requirements (AIR) prohibit anyone from influencing or trying to influence an appraiser’s value conclusion through coercion, collusion, compensation, or intimidation. To avoid any appearance of influence:
- Do not provide a desired/anticipated value or value range to the appraiser.
- Any appraisal or AVM previously completed on the subject property cannot be used as evidence to support a different valuation conclusion for the current appraisal. Do NOT submit any prior valuation report with your ROV request or your request will be rejected. If you find certain elements of a report to be relevant to the current valuation in question, you can provide those specific details on the ROV request form.
GENERAL GUIDANCE ON ERRORS OR OMMISSIONS
For factual errors in the appraisal, specify what is inaccurate. For omissions, specify the features or characteristics of the property that are missing. Examples of factual errors or omissions:
- Incorrect number of total rooms, bedrooms, bathrooms*
- Incorrect square footage of the gross living area*
- Incorrect age of home
- Failing to include features such as a fireplace, swimming pool, patio, or deck
- Failing to describe any recent remodeling or upgrades
*Gross Living Area “GLA” is the square footage of all living area in a home that is above ground level; Room counts include rooms/bedrooms/bathrooms that are above ground level. Basements & finished rooms below ground level are not included in these values.
GENERAL GUIDANCE ON ACCEPTABLE COMPARABLE SALES
- No more than 5 comparable sales may be submitted.
- Comparable sales must be for a closed purchase. Current listings or contingent sales cannot be considered.
- The closing date of the comparable sale must be no more than 12 months prior to the effective date of your appraisal and cannot be after the effective date of your appraisal.
- Comparable sales should have similar characteristics including:
- Style of the home
- Size of the lot
- Gross Living Area (GLA)* - typically the difference in GLA should be less than +/-20% of the subject.
- Number of rooms/bedrooms/bathrooms
- Age, Condition, and Quality of construction.
- The comparable sale must be proximate to your home. While proximity may vary based on the rural or urban location of your home, keep in mind that the closer (and more similar in characteristics) the comparable, the more likely it will be considered appropriated and acceptable. If you live in a subdivision, condominium project, or PUD, recent sales in your development of similar homes are the most persuasive.
- Proximity is determined “as the crow flies” rather than the driving mileage between the comparable.
- Visit https://www.freemaptools.com to help determine the “crow flies” distance from the subject property and proposed comp.
GENERAL GUIDANCE ON APPRAISAL BIAS OR DISCRIMINATIONREQUIREMENTS
Peoples National Bank takes its role in ensuring fair and responsible lending very seriously and does not tolerate bias or discrimination in any aspect of the origination process – including in the appraisal process. Please report your concerns if any of the following apply:
- There is reason to believe any of the following: race, color, religion, national origin, sex, marital status, or age may have improperly impacted the appraised value.
- There is reason to believe race, ethnicity, or other demographics of the neighborhood where the property is located may have improperly influenced the value.
Concerns that the value conclusion in your appraisal was in any way impacted by bias or discrimination must be reported on the ROV Request Form.