A false and inaccurate appraisal was reported, causing a home loan to be denied. A fee double the average estimated cost was paid.
An appraisal was done by Phillip A. Arledge of Arledge Appraisals, LLC at the request of ******** ******** Mortgage on behalf of myself ****** ******. I, at the time, was trying to purchase a modular home through Oak Creek Homes of Abilene, TX. Arledge charged a fee double the expected average rate for the area and submitted an inaccurate report. Because of false comments and personal statements included on the appraisal, the home loan was denied. In November of 2013, Arledge commented in the neighborhood section of his report "Market activity is below average for the Lueders area, due to Lueders being a city in severe decline with no employment, no houses of worship, no shopping within 20 miles..." Also the only homes he included in the area were, in his opinion "valued at an estimated $5,000 - $20,000". Arledge included pictures on three dilapidated houses, one vacant and condemned. However, within merely a five block radius, more than half a dozen houses greatly exceed that low estimation of value. It may also be noted that the houses included in the report were merely located on the road to our property, but when we called and asked why the high cost for appraisal, Arledge responded that he had done "twice the work". On March 6, 2014 I contacted Arledge by phone asking for an explanation of the outrageous cost I had paid for a false, inaccurate appraisal. He told me that he did not work for me, the consumer who had paid his fees, but rather was employed by our lender. Our lender, ***************** Mortgage, has reported that they will never again be using the services of Arledge Appraisals, LLC. He has been rude and unwilling to offer any refund or apology for his lack of accuracy in documenting "the whole picture", which he claims he did. I feel I have been treated unfairly in that Arledge had clearly stated that he did not even want to take the job, and that the lender "had begged him" to do the appraisal. I feel I have paid $1000 to Arledge for a job done poorly, by which an appraisal has been submitted containing completely false information. Arledge's false report has caused the relocation of myself, a disabled veteran, severe delays and emotional stress. I have since had to seek out other options to move into a handicap accessible home. Had an accurate report been submitted, I would have been able have access to a bathroom and kitchen without assistance in December of 2013. Arledge's inaccuracy directly has caused me to be almost completely dependent on my caregiver for another year. My emotional duress is only lessened by the light at the end of the tunnel. I pray that Arledge may not cause other families the same financial burden due to his unwillingness or inability to simply do the job he was hired for as accurately and completely as possible.
no settlement required
Today, March 21, 2014, was the 1st time I've received notice of your complaint.
1st it is violation federal HIPA laws, for anyone with a professional license to discuss their file with anyone other than their client. HIPA covers doctors, lawyers, CPA's, counselors, surveyors and appraisers just to name a few. My client is ***************** Mortgage. I explained this to Mr. ****** when he called me. I can not violate the law and discuss this report with Mr. ****** or the BBB.
I will discuss a couple of his comments. The fee I quoted was negotiated 10 days prior to my actually visiting Lueders. No one had a problem with the fee, until months AFTER the appraisal was complete. It is against the law for an appraiser to accept any assignment with a predetermined outcome. Thus appraisal fees are not contingent on the outcome of the appraisal. I priced my services based on the complexity of the assignment, distance to the property, distance to the comparables, and the fact it was a modular home makes it even more difficult. There are very few modular homes in the local area and lenders normally require modular home comps which makes this a very difficult assignment. Mr. ****** states he found several appraisers with cheaper rates, I personally know of 4 appraisers who turned this assignment down and would not take it at any price due to the difficulty of the assignment. If he found appraisers with cheaper rates, why didn't he use them to begin with.
2nd, the lender is a subsidiary of Oak Creek Homes and they have never contacted me about anything do with this appraisal since we originally discussed it. Of course they weren't happy with the value, since they could not sell their new home but an appraiser's job is to report the MARKET VALUE of a property. Not the COST of the property. MARKET VALUE is what an educated buyer would pay for a property in a given location. I discussed the neighborhood in which the subject was to be located. This neighborhood has properties that are a detriment to the neighborhood, which I included pictures in the report. These detrimental properties were not included in the valuation process but were simply included as a representation of the neighborhood. This detrimental condition in the neighborhood is what an appraiser is required to investigate and report back to the lender. One of the first rules of appraising is Cost does not equal Value. Just like putting fancy rims and paint on a used car, these items do not add to the value when that car is traded in on another vehicle. Thus a new home in a bad location will not hold value from a buyer's perspective. I only reported the types of properties that are in the subject's neighborhood. These detrimental properties are dragging down the value of the nicer properties.
3rd, there are no false statements in the report. I estimated the distance to shopping at 20 miles, when Mr. ****** questioned me about that statement, I googled the distance to Stamford and found it was 16 miles. This variance has no bearing on the overall analysis performed in the report. The fact remains there is no shopping in Lueders which the average buyer considers a detriment.
Mr. ****** doesn't realize it, but I saved him from making a huge mistake. I recently performed an appraisal on a modular home in Eula of similar size and quality. This home cost $175,000 2 years ago and the owner tried to sell it for over a year. It finally was repossessed and sold for $79,000. Almost a $100,000 loss, which Mr. ****** would have incurred if I had not been honest enough to tell the truth in my report.
I can not discuss the details of the report due to confidentiality laws.