Consumer complaint received 2021-09-16
Product: Mortgage — Home equity loan or line of credit (HELOC)
Issue: Applying for a mortgage or refinancing an existing mortgage — 
Company: U.S. BANCORP (MN)

In XX/XX/XXXX, I applied for a HELOC with USBank. After a long process of submitting numerous documents verifying income and assets, I was told that our income and asset evaluation was complete and approved, so they would be moving on to the property evaluation. I explained that I had a certified appraisal from XX/XX/XXXX, just 4 months old, and the USBank employee indicated that they had to conduct their own appraisal. An appraisal was scheduled with XXXX XXXX Appraisals, which I learned is a wholly owned subsidiary of USBank.

I met the appraiser at my home and toured the home with him. I provided a copy of the appraisal that was conducted in XX/XX/XXXX, to the appraiser.

I received a copy of the appraisal from USBank approximately 10 days later and the value was {$86000.00} less than the appraisal from XXXX, despite a real estate market that is escalating rapidly. I reviewed the appraisal in detail and had major concerns with what was included in the appraisal. I am a licensed real estate agent and have worked as a real estate agent for 20 years. 

I contacted the appraiser and asked specifically about the comparables that were used, all of which were valued considerably lower than several other direct comparables to my property. One of the selected comparable was nearly 8 miles from my property while there were 3 other direct comparables that were less than 3 miles from my property. The appraiser would only say that those other properties do not 'bracket ' the features and condition of my property. That is a false statement. I have been inside all of those homes and they are very, very good comparables to my property. The appraiser further stated to me that he had to find a comparable with an 'unfinished ' basement because my basement is unfinished. That is not an appraisal standard that I have ever heard of, nor is it published. It is common knowledge among appraisers and real estate professionals that finished square footage above grade is more valuable than finished square footage below grade. My property has equal to or MORE square footage than comps in this area despite the fact my basement is unfinished. So, that means that my above grade square footage is substantially more than that of similar properties that sold for far more than the comparables that the appraiser chose.

It is my belief that USBank deliberately undervalues properties for Home Equity Lines of Credit so they can charge a higher interest rate and more fees when the loan to value increases. Therefore, increasing their revenue.

USBank disclosed to me that the appraisal process they use is in accordance with Uniform Residential Appraisals and the appraisal was reported on a Uniform Residential Appraisal form. However, the process utilized was not in accordance with uniform appraisal standards.

I, subsequently, forwarded a copy of 2 appraisals of my property. One was from XXXX, more than 6 years ago and the value was {$860000.00} and the other was from XXXX, only 4 months prior to this appraisal and the value was {>= $1,000,000}. Despite the appraiser having this information, he valued the property at {$940000.00}.

I believe, if investigated, it would be discovered that USBank manipulates property valuations in order to control what they lend, to whom they lend and at what rate and fees they lend. In is a shock to me that consumers are subjected to a valuation process, with current fair lending laws, that is controlled and owned by a lender. I lived and worked through the mortgage crisis of XXXX - XXXX and given the resulting lending law changes and controls, this is outrageous that USBank still chooses and is allowed to do business this way.