I owe 280k on a house and asked my lender (CitiMortgage) about refinancing. My credit score is great (close to 850), and I'm a customer in good standing.

CitiMortgage's appraisal came back at around 345k -- whereas I was expecting at least 380k -- and they say I need at least 365k in order to avoid PMI.

I disputed the appraisal, but it's not looking good; I really feel cheated. The appraiser came to my house and spent a whole 3-4 minutes. He compared my house with houses that were 10-20 years older and in really old subdivisions.

In any event, why is Citi saying the value of my house needs to be 365k to avoid PMI? Shouldn't it be around 350k if I owe 280k?

edit 1

I got the call from citimortgage and they denied my appraisal dispute. I asked why and the manager at citimortgage said he had no answer. I then questioned him further about why he did not know and then I asked about why I would have to pay PMI and he couldn't answer that, he said "I'm not a licensed mortgage consultant, I'm just a manager".

Do I have any legal options...I am so frustrated with them.

  • Is there a cash out or are they rolling into the refinance the closing costs? Commented Apr 10, 2015 at 19:19
  • Originally they were rolling the closing costs into the refinance, they are about 3k in closing but Im willing to pay the closing costs...outta my own pocket. Is there anything else I can do about how unfair I feel about the appraisal? I am disputing it and I havent gotten the final word, but the email just looks shady, this is what I got from the loan manager "I did see that the appeal was reviewed and I want to go over the results with you. I have to run into a meeting right now, but should be out around 4pm. Will you be available around then to talk?"
    – JonH
    Commented Apr 10, 2015 at 19:20
  • 1
    This is one of the questions that easily prompts the "did you ask the company?" responses. Here, I can tell you I agree with your math, but can't comment either on the low appraisal nor a single specific company using a different ratio for PMI. Commented Apr 10, 2015 at 20:58
  • 2
    First option Ask another lender and see if they will make a better offer. You don't have to refi with the same bank; I didn't. Switching banks may increase the closing fees since they'll want to redo things the first bank already checked... but they may be more motivated to work with you in order to land your account. HOWEVER it is a truism that homeowners always have an unrealistic idea of the value of their own property; it is fairly likely that the appraisal you were given is as correct as anything short of an actual sale could be. "Equivalents" is a black art.
    – keshlam
    Commented Apr 10, 2015 at 22:14
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    Automatic cancellation of PMI (for people who are paying PMI currently) is required when LTV reaches 78%. Now, 78% of $365K is $284.7K which is within the ballpark of your $280K currently owed plus $3K+ in closing costs that would be included in your new loan. So, perhaps Citibank wants PMI on new loans at LTV ratios above 78% instead of the usual 80% Commented Apr 11, 2015 at 15:29

3 Answers 3


Never ever use a giant monster mega bank for home loans.

I am sure you probably didn't and they bought your loan from someone else. You have no legal options. What you should do Is look at getting a new loan maybe a 15 year loan. Your payment might be the same with no PMI.

I would check with a relator to see what they think your home is worth. Also if you have any money you can always pay extra to the principle and get yourself to 20% based on the next appraisal.

You might have a legal option regarding what they say you need in value 350k is what it should appraise to for you to get rid of pmi when you owe 280k

Remember Citibank is a publicly traded company and their goal is to make more money. The CEO has a fiduciary relationship with stock holders not customers. They seriously have board meetings to figure out what charges they can invent to screw their customers and make shitloads of money. There is no incentive for them to let you get out of your PMI.

  • I like this answer only because I agree they are in it to make more money. My loan was bought out by citi and my refinance was specifically for a 15 year fixed rate at 3.5. I used to wonder why people made such a fuss about the banks and now I can see why. They are complete cowards, a**wipes, and fools period!
    – JonH
    Commented Apr 11, 2015 at 13:53
  • Happy to see that just today I dropped citimortgage as my lender and now have a 10 year loan at 2.5% fixed rate, 0 points, no PMI rather than a 4.875% 30 year rate with citi mortgage. I went with a company named PrimeLending - they have had excellent customer service and great rates.
    – JonH
    Commented Aug 2, 2016 at 17:00
  • PrimeLending's mortgage was bought out by wells fargo but I still got the same deal in terms of rates.
    – JonH
    Commented Jan 19, 2018 at 17:11

In regards to the legal recourse, no there is none. Also, despite your frustrations with Citi, it may not be their fault. Mortgage companies are now forced to select appraisers (essentially at random) through 3rd party Appraisal Resource Companies (ARCs). This randomization mandate from the government was issued in order to combat fraud, but it is really causing more trouble for homeowners because it took away appraiser accountability. Basically, there's nothing we can do to fire an appraiser anymore. I've had appraiser do terrible jobs, just blatantly wrong, and have gone the distance with the dispute process only to find they won't change the value. My favorite real-life example came from an appraiser who got the bedroom count wrong (4 instead of 5); yet he took pictures of 5 bedrooms. The one he excluded he stated it shouldn't count because it didn't have a closet. Problem is, it DID have a closet. I had the homeowner take pictures of all of the closets in his house, and send them in. He still refused to change the count. After close to 2 months of the dispute process, the ARC came in and changed the count, but did not chagne the value, stating that the room count didn't increase the sqft, and there would be no adjustment in value. I was floored. The only solution we had was to wait for the appraisal to expire, then order it again; which we did. The new appraiser got the count right, and surprisingly (not really), it came in at the right value...

In regards to the value necessary to avoid MI, they are likely using 80%, but it's not based on your current balance vs the value, it's based on the new loan amount (which will include costs, prepaids, skipped mortgage payments, etc) vs the value.

Here are your options:

  1. Get a new appraisal. If you are confident the value is wrong, go somewhere else and get a new appraisal.

  2. Restructure the loan. Any competent Loan Officer would have noticed that you are very close to 80%, and should have offer you the option of splitting the mortgage into a 1st and 2nd loan. Keeping the first loan at 80%, and taking out a 2nd for the difference would avoid MI.

Best Regards,

Jared Newton

  • I like this answer, but I do not have the option of choosing an appraiser, the mortgage company just selects one. Im going to try to call a local credit union on monday and see what they can offer me. If, and I hope...crossing my fingers, some other bank does it citimortgage will be out on 280k dollars worth of interest. Its pennies for them, but they are just such complete a**holes.
    – JonH
    Commented Apr 13, 2015 at 0:49
  • You have to either go elsewhere, or wait for the appraisal to expire... those are your only 2 options. And ALL major banks are A-holes. One customer just doesn't register on their give-a-damn meter... Commented Apr 14, 2015 at 1:54

Do you have any legal options? Not really. Citi is under no obligation to refinance your loan on your terms. But that goes both ways, and you are under no obligation to refinance with Citi!

Get more quotes from another lender. It'll feel really good when you find a lender that wants your business. You might get a better deal. And think how good it will feel to cut ties with Citi!

  • That's true but the issue is I'd have to pay another 500 bucks for an appraisal.
    – JonH
    Commented Apr 10, 2015 at 23:22

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