If you’re not clear on how investment banking worked and how subprime debt was bundled and sold and resold, then you really should see this video. It’s a comedy sketch by Bird & Fortune but is really genius. Trust me. Watch to the end okay?

For many recent home buyers, property values have plummeted. Unless your city auto adjusts downwards for you, you might be interested in this do-it-yourself property tax reduction kit. For more information hit the [link to the AHA site].

It’s a good sign when the investors start shopping. There’s no crystal ball & I don’t feel we’re at the bottom, but we may well be close enough to make it worth shopping. As I’ve been telling my buyers lately, bottom line is if you are renting, your job is secure and you’re planning to buy a home to live in, it’s probably not a bad idea to be shopping now. Some homes are quite reasonable and even entry level buyers can find homes that are at least “okay” in the most important criteria. Location.

It’s coming & it’s coming very soon. Personally, I think it’s going to be good for the business as a whole, it’s going to be good for the market, and ultimately it’ll be good for you – the buyer or seller of real estate.

What is it? It’s the Home Valuation Code of Conduct. That’s a new set of rules that applies to all loans sold to Freddie and Fannie Mae.

Short Version: It’s a set of rules to reduce outside influence and pressure on home appraisers to value a property at a specific value (also known as  ‘hitting a target’)

Long Version:

• People involved in lending can no longer order the appraisal or choose the appraiser.
• Specific types of influence are listed and forbidden.
• There will be a quality control program in place to assess and monitor appraisal quality.
• Lenders will have a “hot line” phone number for appraisers to call to report inappropriate influence.
• Lender must provide a copy of the appraisal three days before closing (subject to waiver by borrower)
• Appraisers cannot bill clients, nor can they take cash payments.

The new process will allow lenders the choice of using an outside AMC (Appraisal Management Company) or use an in house appraisal ordering department, but the internal department must be separate from origination and will be federally monitored.

Why is this good? During the height of the last boom, I saw quite a bit of crazy escalation of prices in the market (ok, we ALL saw it). As a result, it was difficult for appraisers to always find com parables to support the higher prices borrowers were willing to pay. Therefore there was quite a bit of pressure for people in the system, borrowers, realtors, mortgage officers to let the appraiser know they needed to reach a certain dollar value. In some cases, it went even further, with either implied or outright pressure being put on the appraiser. This of course helped to put everyone on the treadmill and “chase balloons” with regard to ever raising prices.

I’ve told my sellers in the past to set prices that were within reasonable value so that they would appraise and buyers to be prepared to restructure the price on, or walk away from a deal that didn’t appraise. I tend to be somewhat conservative with my advice because I want the client to be happy years down the line looking back at their purchase or sale and not look over their shoulder. Really, to me, it’s just the right way to do business.

So with regard to the HVVC, I welcome it. So should you. It’s a good thing.

In California, appraisers are regulated by the California Office of Real Estate Appraisers. Their website is here [LINK]

For more information, see this PDF [LINK] from the California Office of Real Estate Appraisers.

Our Tin & Associates webpage has been moved to a new server and we’re revamping it to closer reflect our image and personality.

We’ll still have web based MLS searching and even better, have more control to update frequently with our open homes and links to our custom web pages for our listings.

It’s all part of our growth and adaptation to the market and to our environment, and I think it’ll help to serve our clients better.