Suddenly, Stricter Appraisals
• The rapidly changing real estate market has led many lenders to require “comps” – sales of comparable properties used to help determine a home’s value – that are no more than 60 to 90 days old, and within one mile of the property being appraised. In addition to searching multiple listing services, many appraisers are seeking fresh comps by talking to REALTORS® and reviewing public records of recently sold homes.
• Some appraisers determine the value of a property based on the neighborhood’s “absorption rate” – the amount of time it will take to sell that market’s entire housing inventory at the current sales pace. Absorption rates of six months or longer imply the demand for housing in that area is lower than the supply. In October, California’s absorption rate was 5.9 months, a substantial reduction from the 15.2 months’ supply of a year ago. The absorption rate can vary throughout the state, and in October, the rate ranged from 3.5 months in the Sacramento region to 6.9 months in the Orange County and Santa Clara regions. Traditionally, areas with a large number of distressed properties have larger volumes of inventory until the median price declines to a level that enables more home buyers to enter the market.
• Real estate markets are local and can vary from neighborhood to neighborhood. It is important that consumers and REALTORS® work with local appraisers that have knowledge of the region. This will help ensure a more accurate appraisal.
To read the full story, please click here:
http://www.nytimes.com/2008/11/23/realestate/23wczo.html?ref=realestate
Property Tax SAVINGS
GOOD NEWS…. For anyone that purchased property between July 1, 2004 and June 30, 2007. Los Angeles County will be sending a letter to homeowners a value reduction for their properties and taxes….
Los Angeles County Assessor Rick Auerbach today announced completion of a decline in value review of homes in Los Angeles County. Auerbach said that due to the declining real estate market, it was his responsibility to review values to make sure homes are properly assessed.
“We looked at homes and condominiums that were purchased between July 1, 2004 and June 30, 2007, based on our analysis of market trends in Los Angeles County,” Auerbach said. “The review included 318,000 homes and condos. Our analysis will result in lower assessments on 128,000 homes and condos and will be reflected on the tax bills to be issued in October.”
The average reduction in assessed value is about $73,000, he added, amounting to an average property tax savings of approximately $750.
“In addition, this review will eliminate the need for many taxpayers to go through the formal appeal process,” Auerbach said. The 128,000 homeowners who will be receiving a value reduction will be notified in writing by June 30 of this year. If they disagree with the amount of the reduction they should contact the nearest Assessor’s District Office and discuss the results. If owners still disagree with the value, they may file an appeal with the county’s Assessment Appeals Board. The deadline for filing an assessment appeal is November 30.
Homeowners who purchased their properties outside of the time period for the review (July 1, 2004 to June 30, 2007) and believe that their property is assessed above its actual value as of January 1, 2008, should file the simple, one-page Decline-in-Value application. The form can be downloaded from the Assessor’s Website at http://assessor.lacounty.gov or an application can be requested by calling 888-807-2111.
have a WONDERFUL day
Louise Oshiro
Cal Counties Title Nation
New Email: louise@louise4title.com
(818) 439-7008
(310) 490-0003
Firms Adopt New Appraisal Rules
Mortgage giants Fannie Mae and Freddie Mac agreed Monday to take steps to combat inflated home appraisals, but critics doubted the changes would do much good.
In an agreement with New York Atty. Gen. Andrew Cuomo, the companies said they would purchase home loans only from lenders that follow new rules spelling out how home appraisals can be conducted. The goal is to force lenders to get appraisals from independent experts who give objective and accurate valuations.
Though appraisers are supposed to be unbiased, critics say they are pressured to give inflated valuations by mortgage brokers and lenders who collect fees based on the dollar value of loans they make. Routine overstatement of home values contributed to the run-up in prices during this decade’s nationwide housing bubble, the critics say. “Today’s agreement with Fannie Mae and Freddie Mac begins to set right what had gone so horribly wrong in the mortgage industry — rampant appraisal fraud,” Cuomo said. “The integrity of our mortgage system depends on independent appraisals.” Some appraisers, however, said the agreement, which takes effect at the start of next year, was unlikely to solve the problem.
Banks will continue to put unspoken pressure on appraisers to value homes at desired levels, said Bill King, owner of ValueOne Appraisal in Federal Way, Wash. “It’s going to be a long time before the fundamental way business gets done gets changed,” King said.
And many appraisers still will do as banks and brokers ask because they want to keep getting hired, said Steve Smith, an appraiser in San Bernardino who has been critical of the industry. “There are more ethical appraisers who have been put out of business than there are appraisers who remain in business,” Smith said. The American Society of Appraisers praised the accord but said the ban on all in-house appraisals could penalize honest appraisers who work for banks.
Fannie Mae and Freddie Mac are government-chartered companies that buy mortgages from lenders, freeing the banks to make many more loans than if they kept the debt on their books. Under the accord, Fannie Mae and Freddie Mac agreed not to purchase loans from banks that use their own employees or affiliated companies to conduct appraisals. Mortgage brokers also would be barred from selecting appraisers. Fannie Mae and Freddie Mac also agreed to pay $24 million to fund an oversight board to monitor compliance with the agreement. The new body would operate a hotline for homeowners and appraisers to lodge allegations of wrongdoin g. Cuomo subpoenaed the two housing-finance companies in November as part of a year-long investigation of mortgage fraud.
In November, Cuomo filed a civil suit accusing a home-appraisal unit of Santa Ana-based First American Corp. of inflating the value of homes, thereby encouraging consumers to pay too much for them or to borrow against equity they didn’t have. First American overstated home values at the behest of home lender Washington Mutual Inc., according to the suit, which is still pending. First American and Washington Mutual have denied wrongdoing. Shares of Fannie Mae and Freddie Mac slumped Monday, as did the stocks of most mortgage lenders. Fannie Mae fell $1.21, or 4.4%, to $26.44. Freddie Mac was down $1.46, or 5.8%, to $23.72.
source: http://www.accountability-central.com/single-view-default/single-view-lexis-nexis/browse/4/article/firms-adopt-new-appraisal-rules-fannie-mae-and-freddie-mac-agree-to-help-deter-inflated-home-valuat/?tx_ttnews%5BbackPid%5D=1&cHash=1d8de8e7f0
