Between 2006 - 2008 statewide foreclosures rose an average of 400%, representing 623,570 properties. Through May 09, another 175,612 properties have entered the pipeline. Florida's coastal communities were hit the hardest, the aftermath of the most speculation and investors. The Herald Tribune shows a map of Florida and the percentage increases in foreclosures during this time period. http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20090813/GRAPHICS02/908079918/2107/BUSINESS&template=graphics
Port Charlotte, Fort Myers and Cape Coral had the largest increase in filings, up 788% while Tampa increased 356%. It is well known that speculators were the first phase of defaults. The problem has spread due to the recession and impact of unemployment. The next phase is just beginning. These are homeowners who are discouraged who either bought at the peak or bought at a good time and borrowed against their homes, and thus are upside down. These owners are increasingly expected to walk. What does this mean to the overall real estate market? Remember - these homes that are foreclosed on eventually make back to the market for sale at very reduced prices. They become the comps for other sales and hence lead to the devaluation of homes and neighborhoods. We have to rid ourselves of this inventory before the market can turn around.
Thursday, August 13, 2009
Monday, August 10, 2009
Operation Freedom Wedding Dress
Got a great request via e-mail today. Women are being asked to donate their wedding dresses to military brides-to-be that are active in service. These dresses will go to women in the Military that can't afford to purchase one of their own. This is a great gift for the women who give so much for us. If you are interested in helping contact Kelly @ 468-6396.
Friday, August 7, 2009
Home Valuation Code of Conduct
What's that? Just another bungled government attempt at oversight and management. Inflated appraisals have been sighted as one of the many consequences of the real estate boom years. Loan were made based on appraisal values that were in many cases inflated through the influence of the lenders. Instead of investigation and punishing those involved, the government has sought through the micro management of Freddie Mac and Fannie Mae to provide a "fair" playing field and oversight. The outcome has been the HVCC - Home Valuation Code of Conduct.
Effective May 1, 2009 Freddie Mac and Fannie Mae will not purchase loans unless in compliance with HVCC . This applies to all newly originated, single family home loans.
THE CODE SPECIFICALLY PROHIBITS LENDERS FROM ACCEPTING APPRAISAL REPORTS COMPLETED BY AN APPRAISER SELECTED, RETAINED OR COMPENSATED IN AMY MANNER BY MORTGAGE BROKERS AND REAL ESTATE AGENTS.
Purpose:
To prevent fraud in mortgage transactions
Remove pressure on appraisers from interested parties
Remove favoritism that could lead to high appraisal
Keep mortgages in line with value
Unintended consequences:
Since lenders can no longer speak directly to appraisers they must use Appraisal Management Companies (AMC's); these are pools of unknown appraisers (qualifications and experience unknown as well).
The AMC's take a cut of the appraisal fee, therefore the appraiser makes less, which is turn has turned many good appraisers away from the business and in many cases lessened the value and quality of the work.
The appraisers may be and often are "out of the area" geographically and not expert in the areas they are appraising; making a true judgement of value difficult.
The appraisal takes longer, as often there is a learning curve for the area involved and the inability to hurry things along due to lack of direct communication.
Who is suffering? THE BUYER AND SELLER
The loan process takes longer and is more costly for both parties.
An unprecedented number of appraisals are coming in below value, costing the buyer or seller or both more money to close or causing the transaction not to close at all. The appraiser are often appraising very conservatively - to be on the "safe" side.
THE ANSWER?
If the concept is to make sure the appraiser does not automatically appraise the property to meet the contract value, why not solve the whole thing by not giving the appraiser a copy of the contract. If we want him or her to give us an honest "opinion" of value, just give them the address of the property and wait for an HONEST answer. Too simple? What do you think?
Effective May 1, 2009 Freddie Mac and Fannie Mae will not purchase loans unless in compliance with HVCC . This applies to all newly originated, single family home loans.
THE CODE SPECIFICALLY PROHIBITS LENDERS FROM ACCEPTING APPRAISAL REPORTS COMPLETED BY AN APPRAISER SELECTED, RETAINED OR COMPENSATED IN AMY MANNER BY MORTGAGE BROKERS AND REAL ESTATE AGENTS.
Purpose:
To prevent fraud in mortgage transactions
Remove pressure on appraisers from interested parties
Remove favoritism that could lead to high appraisal
Keep mortgages in line with value
Unintended consequences:
Since lenders can no longer speak directly to appraisers they must use Appraisal Management Companies (AMC's); these are pools of unknown appraisers (qualifications and experience unknown as well).
The AMC's take a cut of the appraisal fee, therefore the appraiser makes less, which is turn has turned many good appraisers away from the business and in many cases lessened the value and quality of the work.
The appraisers may be and often are "out of the area" geographically and not expert in the areas they are appraising; making a true judgement of value difficult.
The appraisal takes longer, as often there is a learning curve for the area involved and the inability to hurry things along due to lack of direct communication.
Who is suffering? THE BUYER AND SELLER
The loan process takes longer and is more costly for both parties.
An unprecedented number of appraisals are coming in below value, costing the buyer or seller or both more money to close or causing the transaction not to close at all. The appraiser are often appraising very conservatively - to be on the "safe" side.
THE ANSWER?
If the concept is to make sure the appraiser does not automatically appraise the property to meet the contract value, why not solve the whole thing by not giving the appraiser a copy of the contract. If we want him or her to give us an honest "opinion" of value, just give them the address of the property and wait for an HONEST answer. Too simple? What do you think?
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