When the appraisals clash, and the fate of a junior lien of thousands of dollars is at stake, what’s a judge to do? Crunch the numbers himself is how one judge came to a decision when the experts didn’t agree.
In Duarte, the debtor’s appraiser testified that the house was worth $370,000 based on comparables including three bank-owned sales. The junior lien holder’s appraiser came in at $395,000, based on sales that closed post petition. The senior liens totaled $387,435.
The margins were quite small and the stakes quite large.
Read the decision for the court’s own mathematical analysis of the values of the comparables and the court’s view of whether sales of foreclosed properties by the lender should be included among the comparable sales. (I’ll give you a sneak peak: Judge Weissbrodt did consider the sales of REO properties in the neighborhood, rejecting the approach in Serda, 395 B.R. 450 (E.D. Cal. 2008).)
May you never have to try a disputed valuation case. But if you do, arm yourself with the thinking in Duarte.
Image courtesy of parttimesock.