Help From Home Foreclosure is Finally Here

imagesWith President Obama’s foreclosure prevention program in place, home owners may now start to begin the process of saving their homes. This is especially good news for homeowners in the San Fernando Valley, where my real estate appraisers in Valley Village as well as real estate appraisers in North Hollywood have seen the price of homes drop dramatically over the past year. Keep in mind that one of the biggest components to a home appraisal is finding what the comparable prices of surrounding homes are selling for, and when you see foreclosure signs peppered throughout a neighborhood, everybody’s home value goes down. This is one of the reasons so many people are now seeing their homes underwater, which means they owe more than what the house is worth and this makes it very difficult to get a loan modification.

With the help of President Obama’s foreclosure prevention program, many homeowners may get a chance to apply for a loan modification, which will better suit their current economic condition. The plan, which is a multipronged fix, calls for companies to help as many 4 million struggling borrowers by modifying loans so monthly housing payments are no more than 31% of monthly gross income. Separately, homeowners who haven’t missed a payment can refinance into lower-cost loans even if they have little or no equity. This is expected to help up to 5 million homeowners. This will help stop the foreclosures that are steamrolling through cities and towns like the San Fernando Valley, and that in turn will help raise the value on a home appraisal.

The $75 billion foreclosure prevention plan will allow for loan modifications that will provide incentives to borrowers and loan servicers and investors to spur mortgage modifications, even if your home is underwater. The government will also subsidize interest rate reductions to get borrowers to affordable monthly payments. More than likely this will mean that you will need to reappraise your home to find out what it is currently worth, and for real estate appraisers in Valley Village as well as real estate appraisers in North Hollywood, this is most welcome news as their cities have been two of the hardest hit in the housing market crash.

“This plan will help make home ownership more affordable for nine million American families and in doing so, help to stop the damaging impact that declining home prices have on all Americans,” said Housing Secretary Shaun Donovan. This is more than just great news for homeowners, it’s great news for everybody because, as Mr. Donovan states, declining home prices have played a huge roll in the recession we find ourselves in. A rise in home appraisals is one of the signs that things are beginning to improve for everybody, not just people in jeopardy of losing their home, which is why President Obama’s foreclosure prevention plan is a huge part of the stimulus package and good for us all. This will also help raise the value of homes underwater, and bring prices to a reasonable level.

As of today, borrowers can start contacting their servicers to see whether they are eligible for assistance, and they may want to begin to look around for a professional to do their home appraisal so they know what their home is currently worth when they begin the loan modification process. Federal officials will promote the program at homeownership events nationwide, and real estate appraisers are getting up to speed on the new loan modification guidelines. I know, for example, that many real estate appraisers in Valley Village along with their counterparts, real estate appraisers in North Hollywood, are in constant contact with lenders so that they are all on the same page when their customers are ready to begin the process.

There are, however, eligibility criteria you need to meet. For example, the loan modification plan focuses on people who are behind in their payments or are at risk of default, which Federal officials clarified as those: suffering serious hardships, declines in income or increase in expenses; facing an interest rate hike; having high mortgage debt compared to income; owing more than their house is worth, or demonstrating other reasons for being close to default. But if you fit into these categories, the foreclosure prevention plan may be the Godsend you need.

If you or anybody you know is thinking about applying for a loan modification and need help finding out what your home is worth, please visit our real estate appraisers in Valley Village and our real estate appraisers in North Hollywood at www.iappraiseforyou.com and we can help you get the fair market value of your home. You may also want to check out www.hud.gov for more information on who qualifies for President Obama’s foreclosure prevention plan.

Is the Drop in Home Prices Your Chance to Get in?

Good news for people that are looking to purchase a new house; home appraisals show that prices declined at a record pace around the nation in the final three months of 2008, according to an industry report released Tuesday. This is based, in part, on residential appraisals done by professionals in the field. In fact, many real estate appraisers in Valley Village, CA as well as real estate appraisers in North Hollywood, CA know this first hand. While this is bad news for our economy, it may be the one bright spot for people that have waited many years to get into the housing market. Even better is the fact that if these people can get a loan with the new plan for TARP funds, the economy will start to perk up. But, before your pour your hard-earned money into that new house, make sure you employ the services of a reputable real estate appraiser, because with thorough real estate appraisals, you can make sure you are buying a house for the fair market value.

 

I say this is good news because residential appraisals had been showing over-inflated prices for so long that potential home buyers were left out in the cold. If you look at what many home appraisals were going for over the past five years or so, you would wonder how anybody could afford to buy. Then again, we all know by now that most of those home owners couldn’t really afford those homes at all, and got into them through unfair lending practices and sheer greed. In fact, many of the real estate appraisers in Valley Village, CA as well as real estate appraisers in North Hollywood, CA were shocked to see comparables of surrounding homes go up and up while the condition of many of them were seriously lacking. That’s why having a professional real estate appraiser is so important, because they can tell you exactly what the range of prices are in any given market through real estate appraisals.

 

Now depending on how you look at it, the fact that real estate appraisals show that the decline in home prices does not seem to be slowing down it’s either a good thing or a bad thing. It’s a bad thing if you are trying to sell, because residential appraisals reflect the decline; however, it’s a good thing if you are looking to buy because you now may finally be able to afford a home of your own. One of the reasons for the falling home prices is that rising foreclosure activity is putting pressure on prices, as lenders are increasingly pursuing a ‘take what we can get’ selling strategy. Again, this is good news for people looking at home appraisals and seeing the real price of the homes they are trying to purchase.

 

Many experts predict that prices are going to continue to fall; they have to reflect economic reality. But that doesn’t mean you should hedge your bet and wait for the bottom. Sadly, many real estate appraisers in Valley Village along with some real estate appraisers in North Hollywood have seen many of their clients miss out because of this and lose their dream house to the next guy. Hiring a real estate appraiser to help you determine the fair price for a house is a first step. If you find that the house you want appraises for a price within your budget, you should grab it as fast as you can.  

 

What is a Real Estate Appraiser?

From Elizabeth Weintraub, at http://www.about.com

 

Appraisals are an Important Part of Your Home Buying Transaction

A real estate appraisal helps to establish a property’s market value–the likely sales price it would bring if offered in an open and competitive real estate market.

Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending. That is why it is so important to find a real estate appraiser that will work for you in a timely and honest manner.

Don’t confuse a comparative market analysis, or CMA, with an appraisal. Real estate agents use CMAs to help home sellers determine a realistic asking price. Experienced agents often come very close to an appraisal price with their CMAS, but an appraiser’s report is much more detailed–and is the only valuation report a bank will consider when deciding whether or not to lend the money.

About Appraisers and Appraisals

  • Appraisers are licensed by individual states after completing coursework and internship hours that familiarize them with their real estate markets.
  • The lender might use an appraiser on its staff, or contract with an independent appraiser.  
  • The appraiser should be an objective third party, someone who has no financial or other connection to any person involved in the transaction.
  • The property being appraised is called the subject property.
  • You will probably pay for the appraisal when you apply for your loan.

What You’ll See on a Residential Appraisal Report

Appraisals are very detailed reports, but here are a few things they include:

  • Details about the subject property, along with side-by-side comparisons of three similar properties.
  • An evaluation of the overall real estate market in the area.
  • Statements about issues the appraiser feels are harmful to the property’s value, such as poor access to the property.
  • Notations about seriously flawed characteristics, such as a crumbling foundation.
  • An estimate of the average sales time for the property.
  • What type of area the home is in (a development, stand alone acreage, etc.).

Residential Appraisal Methods

There are two common appraisal methods used for residential properties:

Sales Comparison Approach

The appraiser estimates a subject property’s market value by comparing it to similar properties that have sold in the area. The properties used are called comparables, or comps.

No two properties are exactly alike, so the appraiser must compare the comps to the subject property, making paperwork adjustments to the comps in order to make their features more in-line with the subject property’s. The result is a figure that shows what each comp would have sold for if it had the same components as the subject.

Cost Approach

The cost approach is most useful for new properties, where the costs to build are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed.

So What Does the Appraisal Mean to You?

Your personal approval is accomplished early in the loan process, but final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case you default on the loan.

An Appraisal Isn’t a Home Inspection!

Appraisers make notations about obvious problems they see, but they are not home inspectors. They do not test appliances, look at the roof, check the chimney or do any other typical home inspection tasks. Never count on an appraisal to help you determine if the home is in good condition.

If the Appraisal Comes in Low

Don’t panic if the appraisal comes in low, because there are often steps you can take to make the deal work.

If the appraisal uncovers other problems, remember that most problems are correctable. Try to keep your cool and work through issues one step at a time.

If you or somebody you know are interested in more information regarding real estate appraisals, contact us at: www.iappraiseforyou.com