When all else fails, ignore

So after calling Green Tree about removing the PMI on my mortgage, its’ still the typical run around.  Call one week and you get one answer.  Call the next, you get a totally different answer.

I sent in the second appraisal the first week of November.  End of the first week, call to confirm receipt (they say they don’t have a note of it and to call the following week).  Second week, I call to confirm and am told that that yes, they have received it and they have a note that it will be completed by December 10.  I call again on the fourth week of November only to be told that they were denying it again (turns out they were looking at the original appraisal).  Call back the first week of December and find out that now Green Tree claims that they never received the appraisal or my request to remove PMI.

Yep, four weeks and all that time for them to look at a document they already have AND to come up with the excuse that they never received it.  Except for the confirmed transmission fax receipt and the fact their own employee admitted they had received it.

Six months after the process started, still trying to get Green Tree to do their job.

Green Tree Waiting Game

So I’ve secured my own appraisal to dispute the first with the excessively low valuation.  Faxed it off to Green Tree’s escrow department and then wait….and wait.

After hearing nothing from them (they’re supposed to send a letter confirming receipt and telling you they’ll get back to you in 30 days) I reach out to them and I’m told it’s not in the system but to check back next week.  So I do.  This time, I’m told that yes, they have received it and will have a resolution within 30 days.  I am not hopeful. 🙁

Disputing a Green Tree Appraisal

So as I’ve come to expect with Green Tree, nothing goes smoothly or as it should. As you may recall, I’m attempting to have the PMI removed from my Green Tree serviced mortgage — it’s been quite the process.

First, Green Tree denied my request right off the bat, then they said I could get my own appraisal (I saved the voicemail message since they refuse to put anything in writing). Then when I contacted them to find out who I send the appraisal to, I was told I couldn’t do that and they had to send their own guy out. Ironically, about 2 hours after that call with Green Tree, suddenly an appraiser hired by Green Tree calls to do the appraisal. Yep, the appraisal that they denied had been requested directly from Green Tree. Go figure.

But wait, it gets better. The appraisal comes is just low enough that Green Tree can deny the request to remove PMI again, because it’s above the 75% LTV (loan to value) for loan held 2 to 5 years.

Now here’s where the appraisal gets questionable. The appraisal uses a pending listing and an active listing in determining sales comps. A comp isn’t a comp until it’s sold and recorded. Pending and active listings don’t count. And the sold comps they use are rather far from my home and completely excluded 2 homes in my immediate neighborhood that are the same size as my house.

Now, it’s time to dispute appraisal with bad comps and the errors (and probably laziness or perhaps incompetence) of the appraiser. I tried to contact the appraiser directly, but he won’t return calls. I can’t help but think that Green Tree told the guy what they wanted the house to come in at — because he came in almost $100,000 less than neighboring homes. (Yes, it’s San Diego California — homes are expensive here.)

So how do you dispute an appraisal that Green Tree has done?

That’s an excellent question. Green Tree doesn’t have any official forms or information on how to dispute an appraisal they have ordered. I can’t imagine that I am the first person to disagree with an appraisal valuation, so this can’t be a new question for them. Yet Green Tree doesn’t have any guidance on this. I suspect it’s because they hope that their customers just give up and leave the PMI going which means more money for Green Tree.

Since Green Tree does not have a formal process to dispute the appraisal valuation, here’s what I’ve included in my letter:

  1. Summary of the errors, mistakes or incorrect comps utilized.
  2. Pulled other home sales comps that I feel are correct and valid. Unfortunately, this is really doing the work the appraiser should have done, so I’m doing the work for him AND I have to pay his fee.
  3. Pulled information from the Case-Shiller home price index to show that the increase in value that the appraiser indicated is not in line with what the San Diego region has experienced. Here is an example of the Excel file with a fake home valuation.

I am sure that they’ll try to find more ways to deny the PMI removal request, but it’s worth a shot. Next step, filing a complaint with the CFPB.

Getting Rid of PMI with Green Tree Servicing

You finally have enough equity in your home to request your mortgage company remove PMI. It seems like it would be an easy thing to do, right? Nope. (Well, perhaps it depends who your mortgage servicer is. Mine is Green Tree, and no, not so easy.)

Private Mortgage Insurance (PMI) is usually a requirement from your mortgage lender if you purchase or refinance your home with less than 20% equity. PMI can be expensive – it usually costs between 0.5 to 1% of your loan amount on an annual basis. PMI used to be deductible on your income tax, but starting 2014, that savings expired (though it could be extended if Congress could actually pass legislation).

Say your home is in California, like mine is, and your loan is for $400,000. Let’s take the middle of the road PMI example (0.75%), which means you’ll be paying approximately $3,000 a year in PMI expenses. That’s $250 a month!

Wouldn’t it be nice to take that $250 a month and spend it on anything else? Pay down credit cards, add it to your retirement account, add it to your mortgage principal or heck, even go out to dinner. Either way, when you’ve reached a specific threshold, don’t be shy in asking your mortgage servicer to cancel PMI.

Your process may be different depending on who your mortgage servicer is. Mine is Green Tree, so this is the process I was supposed to follow.

  • You will need to write a letter officially requesting PMI to be removed. (You can use my letter as a sample for your request to remove PMI.)
  • I didn’t do this because Green Tree never said it had to be done, but send off the “Authorization for Appraisal” at the same time. Green Tree claims their escrow team “couldn’t” do anything because I hadn’t authorized an appraisal. This even after my letter requested to be notified what I needed to do to get rid of PMI. I’d send both at the same time just so Green Tree has no excuse for rejecting your request to remove PMI.
  • Now you wait, and wait. You should receive a letter from Green Tree acknowledging receipt of your request and that they will get back to you within 30 days. My reading of the law states it’s 30 days (as in calendar days) but they told me on the phone, they consider it business days.

Unfortunately, in my case, this is where the process stopped. After the letter and multiple times following up with them, on exactly the 30th business day, they send a letter denying my request to remove PMI. They didn’t even order an appraisal to see what my home was worth, they just said no. (Funny thing, if you look at the form you fill out to authorize the appraisal, the bottom corner says “FNMA MI Denial”. So clearly, before you even start the process, they intend to deny your request.)

Now, this is what should happen next. I haven’t gotten here yet. At this point, you should be able to request an appraisal of your home to prove the value of the property, and then get a loan to value (LTV) that will help you remove PMI.

Here’s something you will need to know. The loan to value (LTV) for your loan will have different percentages based on a few factors. If you have a conventional loan, you cannot request to remove PMI until you have had the loan for at least 2 years. And in California, your mortgage servicer can require that the LTV is 75% (not 80%) until you’ve had the loan for 5 years. Once you reach 5 years, the 80% mark applies. Also, your lender must remove PMI “automatically” based on when your loan is expected to fall to 78% LTV based on the schedule of when you originated (got) the loan. BUT you can request it at 80% — so stay on top of your loan.

I’ll keep you updated on how the process goes. I’m ordering my own appraisal, and will be sending it to Green Tree. Wish me luck.