Consumer complaint received 2018-03-29
Product: Mortgage — Conventional home mortgage
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: Rocket Mortgage, LLC (CA)

I am working on a refinance with Rocket Mortgage. An appraisal was completed by a vendor they have used multiple times. The value came back less than expected based upon recent sales in my neighborhood and competing neighborhoods within a XXXX XXXX mile radius. 
These are the initial comparables that I provided as my dispute : XXXX XXXX XXXX  ( XXXX miles ) SOLD : XX/XX/XXXX {$360000.00} XXXX Square Feet ( XXXX square feet ) Lot Size : XXXX square feet ( XXXX square feet ) Adjustments per Appraiser for lot size : + {$1100.00} ( at an estimated {$1.00} per square foot and adjustment for square footage XXXX square feet ( at an estimated {$55.00} per square foot. 
ADJUSTED VALUE : {$350000.00} Per Appraiser calculations, this comp would carry the most weight at 38 % weight for being the closest to our gross living area or {$130000.00}. Add the 36 % for comp 2 of {$130000.00} and 26 % for comp 3 of {$91000.00}. Based on these figures our Comparison Value would be {$360000.00}. If all comps were weighed the same, then our value per the Comparison Value would be {$360000.00}. 

XXXX XXXX XXXX ( XXXX miles ) SOLD : XX/XX/XXXX {$350000.00} XXXX Square Feet ( XXXX square feet ) Lot Size : XXXX square feet ( XXXX square feet ) Adjustments per Appraiser for lot size : + {$2400.00} ( at an estimated {$1.00} per square foot ADJUSTED VALUE : {$350000.00} Per Appraiser calculations, this comp would carry the most weight at 38 % weight or {$130000.00}. Add the 36 % for comp 2 of {$130000.00} and 26 % for comp 3 of {$91000.00}. Based on these figures our Comparison Value would be {$360000.00}. 

The response from the appraiser was that he agreed with the XXXX XXXX comparable, but refused to adjust our value accordingly to the better comparable. He refused to utilize the XXXX XXXX XXXX even though it was literally around the corner from the comparable he used ( exact same floor plan, condition and square footage ) as he stated it was just outside a half mile radius. 

This was my response to Rocket Mortgage : I have reviewed the appraisal update posted online as well as the additional comments made by the appraiser. Please see my concerns below. 
1. The appraiser accepted the better comparable of XXXX XXXX XXXX, but only added it as Comparable Number 6 without adjusting the value. As he agreed that this comparable should have been used, he should have replaced Comparable Number 1 and adjusted the value for our home. 
2. The appraiser rejected the better comparable at XXXX XXXX XXXX because it was more the XXXX miles away from our home. Using the XXXX radius from our home provided the appraiser exactly 4 comparable sales in the past 90 days, this does not allow for an accurate view of the current market. This is a direct contradiction with the Appraisers Certification # 4 that states the appraiser has adequate comparable market data to develop a reliable sales comparison. 
a. In fact, FNMA appraisal guidelines do not have a specific radius for obtaining current comparable sales, but advises appraisers to first look in the neighborhood of the subject property ( i.e. Comparables 2 & 3 ) and then expand that search to find the best available comparables in competing neighborhoods. The XXXX XXXX XXXX is in the same competing neighborhood as the XXXX property. 
b. Please see FNMA guidelines : XXXX XXXX XXXX   XXXX XXXX does allow for the use of comparable sales that are located in competing neighborhoods, as these may simply be the best comparables available and the most appropriate for the appraisers analysis. If this situation arises, the appraiser must not expand the neighborhood boundaries just to encompass the comparables selected. The appraiser expanded the neighborhood boundaries to just encompass the XXXX comparable. 
i. It is apparent that the appraiser restricted the comparable radius location to lower the value of our property and did not fully review or adjust our value when provided with two separate better comparables. 
3. It is questionable that on XX/XX/XXXX the XXXX property was listed for only {$320000.00} and 7 days later on XX/XX/XXXX the Generations property was listed on the market for {$340000.00}, a difference of more than {$29000.00} for the same property layout. Both properties sold in the same month for above the asking price. This data should have concerned the appraiser and he should have not used the lower comp as it is not the normal sales price in the area. 
4. The active sales the appraiser used were outside his XXXX radius because of the shortage of available properties within that limited radius. This is very reflective of our neighborhood, as our direct neighborhood is very small ( consisting of less than XXXX homes ),  surrounded by a park, a large nature preserve and then commercial property before reaching competing neighborhoods. Therefore to gain adequate market data, both active and completed sales should be reviewed with a more expanded radius. 

I dont know why the appraiser disparately treated the approach of our appraisal, it appears that he is actively redlining my neighborhood to appear less valuable in an approach to cause less favorable mortgage and equity terms as our neighborhood mostly consists of mixed and minority families. 

Rocket Mortgage appropriately escalated this and went back to vendor with the additional concerns, along with 3 more recent comparables that I provided of : XXXX XXXX XXXX XXXX  ( XXXX mile away ) SOLD : XX/XX/XXXX {$370000.00} XXXX Square Feet ( XXXX square feet ) XXXX XXXX XXXX XXXX ( XXXX mile away ) SOLD : XX/XX/XXXX {$360000.00} XXXX Square Feet ( XXXX square feet ) XXXX XXXX XXXX XXXX  ( XXXX mile away ) SOLD : XX/XX/XXXX {$350000.00} XXXX Square Feet ( XXXX square feet ) The Vendor 's opinion was that the appraiser was within his rights to provide the value he gave and the keep the very confined radius. 

I thanked Rocket Mortgage for their attempts, I understand that their hands are tied by the vendor they are working with. However, I do believe this vendor is not working within parameters or ethics, law nor regulation and would like a thorough review of their business practices. The Appraisal company 's name was XXXX XXXX Appraisals, it appears the company has exactly 2 employees and was established in XX/XX/XXXX.