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My Tax Assessed Value Dropped and My Lender Won’t Modify My Mortgage. – Michael

“Dear Steve,

First and foremost I would like to thank you for all of the advice and help that you offer on your website. I feel very fortunate to have stumbled upon it while doing a Google search, and applaude you for offering your feedback free of charge.

My situation is as follows… I bought my townhouse a little over a year ago, at which time the County Assessed value was $229,000, and the buyer was asking $225,000. Was finally able to settle on a sale price of $213,000. As I am sure you are aware, a requirement of successfully closing the sale of the property is to have an appraisal done. At which time came back at exactly the sale price, $213,000. I was not aware at the time, but after doing research found out that the appraiser was one that the local lender, APEX Home Loans, used for all their appraisal work. Which makes me question whether or not they appraised the home for the exact sale price to ensure no set backs with the closing of the deal.

Either way, the new County Assesments just came out and they are saying that the value of my home is now $180,000. So I am currently paying on a $213,000 loan for a home that is worth significantly less. Especially since I have sunk nearly $12,000 into making repairs, roof replacement, window replacement, and a few other items. All of which were necessary due to water leaking into the home. I called the current servicer, SunTrust Mortgage to tell them that I wanted a loan modification or that I would simply stop making my payments, take out the new windows, tear off the roof, and vacate the property. I know it may sound foolish, but I am only 25, and although it has taken me a very long time to get my credit score where it is now. I would rather have that destroyed then continue to live paycheck to paycheck, while praying that nothing else goes wrong with this property.

Long story short, SunTrust was not very receptive to my threats and reiterated that the phone was being recorded. And being the short tempered individual that I am, merely said “good, I hope you flag this call because if it comes to puting food on the table for my girlfriend and I, or paying the mortgage, I am doing the latter of the two”.

So my question for you is.. Can I do anything about this besides going through the Making Homes Affordable process? I do have money in savings, a large portion that was due to me when my employer switched me from an exempt to non-exempt employee, and owed me two years worth of overtime pay. The paperwork for the MHA program asks about all assets, and I do not think it is fair that I am constantly, and I mean every month, pulling from my savings account just to pay the bills. Unless I win the lottery, or my McDonald’s stock sky rockets, that money will eventually run out at which time there could be a number of new programs available, or none at all. Either way, not risk I am willing to take.

Any insight from you and the readers would be greatly appreciated. This whole being swindled by the lender & sinking thousands into my first home, merely weeks after purchasing it, has really stressed me to what I perceive to be my breaking point.

Michael”

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The Answer

Dear Michael,

Thank you for your kind words and feedback.

The first key point I need to tell you is that assessed value has nothing to do with real property value. Ultimately the value of any property is that value that a buyer and seller agree on. There is no fixed value that can otherwise be assigned. However, a property appraisal looks into the sales of other nearby comparable or like properties and comes with with a professional educated guess about what your property would be worth if it sold.

County tax assessed values are completely arbitrary and an assessment is not even based on your home but may be adjusted up or down based on a general area decision and then a multiplier for square footage and property size. Property assessments are challenged all the time and consumers win. The goal is typically to lower the tax value in order to pay less in taxes.

There is nothing in what you shared that would indicate to me you were cheated in any way by the lender. It sounds like an appraiser valued the property and you agreed to that price. From the time the home was purchased the property value may have dropped a bit. If you feel the appraisal was not accurate, that’s an issue with the appraiser, not the lender.

If you don’t have a copy, you might want to get a copy of the appraisal and review it to determine how the property value was calculated. While there were issues with drive-by appraisals back in the early 2000s, it is much less of an issue today. I generally find property appraisers to be a professional group of people that work hard and have a tremendous amount of liability with everyone looking over their shoulder these days.

If you want to investigate what, if any, loan programs may be available for your loan I’d suggest you talk to a free HUD Housing Counselor and review the available programs.

Otherwise, if you want to know the current fair market value of your property, get a new appraisal done. And you just might want to call the lender back and apologize. It doesn’t sound like they deserved what they got from you if this was all triggered by an artificial tax assessed value.

Please post your responses and follow-up messages to me on this in the comments section below.

Big Hug!

My Tax Assessed Value Dropped and My Lender Wont Modify My Mortgage.   Michael
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About Steve Rhode

Steve Rhode
Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
  • Maxwell

    Steve,

    What you are saying makes sense, and I am aware that the county assessment is not something to use in regards to finding the true value of my home. I should have added in my original post that I have a friend in the real estate business who was able to run a report on the comps in the area. Which has shown a decrease in property sale prices since last year, and an increase in foreclosures. Two of which are within viewing distance of my front porch.

    Either way, thanks for the response.

    Mike

    • http://GetOutOfDebt.org Steve Rhode

      It could just be that at the time of the sale the home was worth $213,000 but since then events, like the nearby foreclosures, led to the value slipping. But I still don’t think we know what the current market value of the property really is with an appraisal or educated comp comparison.

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