I am pretty new to the world of real estate investing, but from everything I have read and being an ethical person, this just wasn’t right. Here is what’s going on:
6 months ago I had a friend willing to sell a 2/1 townhome to me for $50K. The property needed minimal repairs (carpet cleaned - less than 6 months old and a good cleaning to the kitchen/bathroom). My current mortgage broker at the time, got an appraisal done and initially it was $50k. Due to an error on the appraisers behalf (appraiser reported the property as having CHAC, which it did not) the appraisal was dropped to $45k, ultimately killing the deal(this is just a short form of what went on).
Fastforward to the present. The owner of the property now had been through a bankruptcy and was very eager to sell. When the bankruptcy was discharged, I negotiated a sell of $27, 000. Since I had already had an appraisal done 6 months prior, I went with the same appraisal company as before, knowing they had previously appraised it for at least $45,000. My plan was to get a private money loan for the $27k purchase price and after 3 months seasoning, do a 90% cash out refinance and lower the monthly payments. Everything was set to close until the appraisal company gave an appraisal of $27k, the current contract price. I questioned the dramatic drop in price and was told various untruths (i.e. the housing prices in the area a decreasing, etc.). I even faxed comps found in the area that were more recent and closer in style/sq. ft as the subject property. I never received any responses. A few days after that the property owner received a call from a mortgage brokerage company asking if they would be interested in refinancing the property because the property was valued around $80k. Coincidentally ???, the mortgage brokerage firm and the appraisal company are in the same building and are owned/operated by the same persons. Also, the person from the mortgage brokerage company was the same mortgage broker that was brokering the deal 6 months ago. I am now using a different broker. Who can I address about this matter and is there any possible legal recourse that can be sought? I know this is alot of info and this is the condensed version. Any insights will greatly be appreciated. Thank you!!!
I do not know all of the parameters of your situation. However, based at what I read quickly it appears that you were taken advantage of.
As with any situation you could report them to the State, but I do not know that it will do any good.
I always tell my clients to shop around. Shame on you for going back to where they burned you the first time. 
Can you get the seller to give you a copy of the appraisal at $80,000 through the same appraisal company? You have the one for $45,000 and the one at $27,000? If you can get it, I’d explore filing a civil suit for damages. I wouldn’t be surprised if either the mortgage company or the appraiser bought it for themselves either. Try to work with national companies from now on. The local guys are more likely to try and steal your good deal.
I would get another appriasal and explain to the new appraiser what has happend and then show him your new comps. Most appraisers pull comps and then justify the sales price. This may be the reason that they came in at 27 k the second time. My experience is that appraisers do not like to give a value much higher than the contract price because it tends to look fishy
I agree that some appraiser’s may feel that it looks fishy. However, a good appraiser will find the proper comps and give you a fair value.
There are quality appraisers and Loan Officers out there. You just have to find them.