Appraisal review by underwriter costs me points at closing

I just closed my loan yesterday (30 yr fixed, no points, 4.875%).  It was a good rate and I'm happy with that.  I'm ticked off because I feel like the company underwriting the loan had me over a barrel and ripped me off.  In short, I had two appraisals (one from this loan app, and one from a prior loan app where I missed the closing date) that put my loan to value ratio low enough that I was to get a half point credit towards my closing costs.  The underwriter ran an automated appraisal and the numbers came in 10-20% lower than the local appraisers' valuation.  Because of this the underwriter called for a review of the appraisal.  In this process an appraiser 60 miles away, who had never seen my house, reviewed the appraisals and said they were high by 15%.  Because of this, I not only lost 0.25% in credit from the lender, but also incurred a fee of 0.25%.  In the end, I ate 0.375% and my broker ate 0.125%.

This seems mighty fishy to me.  It seems like the underwriter, the targeted buyer of the loan, and the reviewing underwriter all stand to benefit at my expense.  I would like to complain to someone, but I'm not sure where to go.

Does anyone have any thoughts on (a) the legitimacy of what happened, or (b) where I might be able to register a complaint that would have some effect?

Thanks,

Tim

Tim,

There is essentially no one to complain to, or at least no one that will listen. I would also add that the u/w almost certainly does not evaluate your loan scenario and hold you over a barrel when they make decisions. In fact, they are probably more concerned about their jobs when looking at files than your rate. This is just the product of a very difficult lending environment. Almost certainly your lender will be selling your loan. The last thing they want is to have trouble dumping it as a result of a less than ironclad appraisal or more importantly endanger their rep on the secondaty market.

Very common that appraisals get extra scrutiny these days.

This is not to say that you should not be frustrated, but it is a product of our current market. 

Tim,

Scenarios similar to the one you describe happen everyday.  Because of the lending environment, the valuation of homes has taken center stage and no one wants to be accused of inflating values.  It is very frustrating to borrowers and brokers alike.

Look at the upside.  You got a 30 year fixed rate mortgage under 5%.  Do you realize just how lucky you are?  If not, talk to people who had mortgages in the early to mid 80s; you'll find out that you are paying 2/3s less in interest than many had back then.  Trust me, 20 years from now, you will be telling stories of the great rate you got in 2009.

Thanks Kent and Jason for the helpful perspective.

Tim