I suspect we will be hearing about this some time soon. Do people think that appraiser-lender love is only a sub prime thing? We are just getting started.
Sorry for taking such a long break, thank you for the encouragement.
Saturday, November 10, 2007
Friday, August 17, 2007
Confidence Crisis
Californians rush to pull money from Countrywide Bank
Parent of home loan company assures that bank is stable
LA Times
Published on: 08/17/07
Parent of home loan company assures that bank is stable
LA Times
Published on: 08/17/07
LOS ANGELES — Anxious customers jammed the phone lines and Web site of Countrywide Bank and crowded its branch offices to pull out their savings because of concerns about the financial problems of the mortgage lender that owns the bank.
Countrywide Financial Corp., the biggest home-loan company in the United States, sought Thursday to assure depositors and the financial industry that both it and its bank were fiscally stable. And federal regulators said they weren't alarmed by the volume of withdrawals from the bank.
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The mortgage lender said it would further tighten its loan standards and make fewer large mortgages. Those moves could make it harder to get a home loan and further depress the housing market.
The rush to withdraw money — by depositors that included a former Los Angeles Kings star hockey player and an executive of a rival home-loan company — came a day after fears arose that Countrywide Financial could file for bankruptcy protection because of a worsening credit crunch stemming from the sub-prime mortgage meltdown.
The parent firm borrowed $11.5 billion Thursday by using up an existing line of credit from 40 banks, saying the money would help the lender meet its funding needs and continue to grow. But stock investors, apparently alarmed that the company felt compelled to use the credit line, sent Countrywide's already battered stock down an additional 11 percent.
At Countrywide Bank offices, in a scene rare since the U.S. savings-and-loan crisis ended in the early '90s, so many people showed up to take out some or all of their money that in some cases they had to leave their names.
In west Los Angeles, a Countrywide supervisor brought in from another office served coffee to more than 25 people waiting calmly for their turn with the one clerk who could help them.
Bill Ashmore drove his Porsche Cayenne to Countrywide's Laguna Niguel office and waited half an hour to cash out $500,000, which he then wired to an account at Bank of America.
"It's because of the fear of the bankruptcy," said Ashmore, president of Irvine's Impac Mortgage Holdings, which escaped bankruptcy itself recently by shutting down virtually all its lending and laying off hundreds of employees.
"It's got my wife totally freaked out," he said. "I just don't want to deal with it. I don't care about losing 90 days' interest, I don't care if it's FDIC-insured — I just want it out."
Customers, most of whom said they were acting just in case, said they went to the lightly staffed branches because they couldn't get through to the bank via its toll-free number or its slow-moving Web site.
"I doubt it will go under, but I want to protect myself," said Rogie Vachon, who was the Kings' most valuable player for several years in the '70s. Vachon said he went to the west Los Angeles branch to withdraw some money because his account balance exceeded the limit on insurance provided by the Federal Deposit Insurance Corp.
In a statement, the bank said: "It is very important to remember that Countrywide Bank is well capitalized, with FDIC-insured deposits, and is one of the largest banks in the United States, with assets over $107 billion." The bank added that it had significant access to outside capital and was still highly rated by debt-rating firms.
As for parent firm Countrywide Financial, the mortgage giant said draining its credit line would allow it to continue operations while refocusing its business on the "plain vanilla" mortgage loans that can be sold to Fannie Mae and Freddie Mac, the government-sponsored mortgage finance companies.
Countrywide said it planned to fund more mortgages through Countrywide Bank and have the bank invest in certain loans that Fannie Mae and Freddie Mac won't buy, such as "jumbo" mortgages, which in California are defined as those over $417,000.
Countrywide recently was funding about $40 billion a month in mortgages. Of those, about half qualified to be sold to Freddie Mac or Fannie Mae, and half were "nonconforming" loans the agencies don't buy, including sub-prime mortgages to higher-risk borrowers as well as jumbo loans, which account for 43 percent of all mortgages issued in Southern California.
Company executives declined to discuss how the heavy withdrawals at Countrywide Bank branches Thursday might interfere with that strategy.
Wednesday, August 15, 2007
Listen to this guy
From : http://www.mortgagebrokercoaching.com/2007/08/how-to-choose-t.html#comments
What is their procedure if they find a problem with value and/or one of the many other things that could arise? It would seriously piss me off if an appraiser encountered a problem and didn't care enough to make a phone call prior to producing the report. Some appraisers, I found, were simply too busy to care and therefore were not on my list. I had to have a caring, thoughtful and honest appraiser who understood that this whole process is not an empirical science but rather the collection of available data and then the rendering of an opinion. Sometimes that involves reaching out to others for additional data rather than preparing a sloppy report. Insist on good communication!
Isn't it great that these brokers are soo smart that they tell appraisers what an appraisal is.
What if teachers gave grades before the test was taken based on previous performances. You must take the test and see what the grade will be, anything can happen during the test.
What is their procedure if they find a problem with value and/or one of the many other things that could arise? It would seriously piss me off if an appraiser encountered a problem and didn't care enough to make a phone call prior to producing the report. Some appraisers, I found, were simply too busy to care and therefore were not on my list. I had to have a caring, thoughtful and honest appraiser who understood that this whole process is not an empirical science but rather the collection of available data and then the rendering of an opinion. Sometimes that involves reaching out to others for additional data rather than preparing a sloppy report. Insist on good communication!
Isn't it great that these brokers are soo smart that they tell appraisers what an appraisal is.
What if teachers gave grades before the test was taken based on previous performances. You must take the test and see what the grade will be, anything can happen during the test.
Wonder why we are in this mess?
"A wise appraiser once told me: Everyone in the sales transaction is smarter than the appraiser because they already know the number. The real estate listing broker and selling broker, the mortgage broker, the lender and of course the buyer and seller all know the number. The appraiser is the last one to the party."
From a real estate agent:
# Ask your agent to find out which houses were used as comparables. Does the agent agree they were good comps? Most appraisers haven't seen the comps up close and personal the way agents do. The home appraiser might have unknowingly used houses that needed a lot of work. If poor condition is verified, ask the appraiser to investigate the comparables to see if adjustments should have been made.
This is why i hate real estate agents, TOTAL BULLSHIT ARTISTS.
From a real estate agent:
Dispute the Appraisal
# Ask the lender for another appraisal. The lender may send out a new home appraiser or ask the original appraiser to reevaluate the property.# Ask your agent to find out which houses were used as comparables. Does the agent agree they were good comps? Most appraisers haven't seen the comps up close and personal the way agents do. The home appraiser might have unknowingly used houses that needed a lot of work. If poor condition is verified, ask the appraiser to investigate the comparables to see if adjustments should have been made.
This is why i hate real estate agents, TOTAL BULLSHIT ARTISTS.
Southern Cal Sinking
Southland home sales slowest since 1995
August 14, 2007
La Jolla,CA----Southern California home sales remained at their lowest level since the mid 1990s last month as potential buyers continued to hold out for lower prices. The median price paid for a home inched back up to a peak first reached in March, tugged up by sales in high-end markets, a real estate information service reported.
A total of 17,867 new and resale homes sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties last month. That was down 11.4 percent from 20,166 for the previous month, and down 27.4 percent from 24,614 for July last year, according to DataQuick Information Systems.
Last month's sales were the slowest for any July since 1995, when 16,225 homes sold, the lowest for any July in DataQuick's statistics, which go back to 1988. The strongest July was in 2003, when 38,996 homes sold. The July sales average is 26,829.
"These are interesting times because the slowdown in home sales isn't part of a broader economic slowdown, it's a post-frenzy re-balancing act. The last time we had sales this slow, Southern California had been in recession for a few years. Jobs were being lost in droves, people were leaving the area and home prices fell significantly. This time around we haven't seen that, sellers are holding out and we can only assume demand is building up," said Marshall Prentice, DataQuick president.
The median price paid for a Southland home was $505,000 last month, the same as the record high recorded in March, April and May. It was up 0.6 percent from $502,000 for June, and up 3.7 percent from $487,000 for July last year.
When adjusted for shifts in market mix (i.e. fewer lower-cost homes selling now), year-over-year price changes went negative in January and are now roughly three percent below year-ago levels. The declines are in the lower half of the market, while prices are flat or even increasing in the upper half of the market.
DataQuick, a subsidiary of Vancouver-based MacDonald Dettwiler and Associates, monitors real estate activity nationwide and provides information to consumers, educational institutions, public agencies, lending institutions, title companies and industry analysts.
The typical monthly mortgage payment that Southland buyers committed themselves to paying was $2,447 last month, up from $2,430 the previous month, and up from $2,413 a year ago. Adjusted for inflation, current payments are 11.4 percent above typical payments in the spring of 1989, the peak of the prior real estate cycle. They are 1.4 percent below the current cycle's peak one year ago.
Foreclosure resales accounted for 8.3 percent of July's sales activity, up from 7.7 percent in June, and up from 2.0 percent in July of last year. Foreclosure resales do not yet have a marketwide effect on prices, although pockets of foreclosure discounts appear to be emerging in some local Inland Empire and High Desert markets.
Other indicators of market distress continue to move in different directions. Financing with adjustable-rate mortgages and multiple mortgages has declined significantly. Down payment sizes are stable, flipping rates and non-owner occupied buying activity is flat, DataQuick reported.
All Homes No Sold
Jul-06 No Sold
Jul-07 Pct.
Chg Median
Jul-06 Median
Jul-07 Pct.
Chg Los Angeles 8,844 6,809 -23.0% $520,000 $547,500 5.3% Orange 2,982 2,391 -19.8% $640,000 $640,000 0.0% Riverside 4,763 2,769 -41.9% $415,000 $399,000 -3.9% San Bernardino 3,500 2,008 -42.6% $366,500 $355,000 -3.1% San Diego 3,584 3,106 -13.3% $500,000 $489,000 -2.2% Ventura 941 784 -16.7% $614,000 $582,500 -5.1% SoCal 24,614 17,867 -27.4% $487,000 $505,000 3.7%
Source: DQNews.com
Tuesday, August 14, 2007
SLOW, how about nothing
Its been the slowest month of work for my business in over five years. Boo hoo
Monday, August 13, 2007
Same old same old
Home appraiser Michael Mathis bought a Redlands fixer-upper in 2003 with hopes of turning it into a 9,000-square-foot dream house. Now, he wonders whether he'll have the money to see his plan become reality.
Mathis, 52, bought the home when the housing market was on fire and he was doing as many as 20 estimates a week. His income soared into the mid-six figures. Now his pay has fallen to less than $75,000 a year, and he is lucky to do even a dozen appraisals a month. What's more, his work has convinced him that things will get worse before they get better.
"I don't see anything positive happening in this market until effective demand picks up -- and prices come down," he said.
Mathis the appraiser understands that the real estate market is cyclical and that good times will return. But Mathis the homeowner, who has borrowed heavily to finance his dream, worries about being overextended on his under-construction home and the one he is living in but trying to sell.
That home, also in Redlands, has been on the market since December. He's cut the price twice in hopes of getting an offer. "I've already lost $80,000 more than I planned," he said.
Weekend getaways with his wife to Las Vegas have been eliminated and dinners out have turned into trips to the local fast-food joint.
All this has forced Mathis -- whose sense of fun led him to name his business AAI Services, for Appraisers Are Insane -- to think of ways to cultivate new business. He recently managed to line up an appraisal of his mother's church. And he is starting to pick up appraisal business from lenders that have foreclosures they need to sell.
"This is the darkest moment I've ever gone through, but compared to other people who really suffer in this world, how can I complain because I'm not making more money right now?" Mathis said. "I just need to keep it in perspective."
Mathis, 52, bought the home when the housing market was on fire and he was doing as many as 20 estimates a week. His income soared into the mid-six figures. Now his pay has fallen to less than $75,000 a year, and he is lucky to do even a dozen appraisals a month. What's more, his work has convinced him that things will get worse before they get better.
"I don't see anything positive happening in this market until effective demand picks up -- and prices come down," he said.
Mathis the appraiser understands that the real estate market is cyclical and that good times will return. But Mathis the homeowner, who has borrowed heavily to finance his dream, worries about being overextended on his under-construction home and the one he is living in but trying to sell.
That home, also in Redlands, has been on the market since December. He's cut the price twice in hopes of getting an offer. "I've already lost $80,000 more than I planned," he said.
Weekend getaways with his wife to Las Vegas have been eliminated and dinners out have turned into trips to the local fast-food joint.
All this has forced Mathis -- whose sense of fun led him to name his business AAI Services, for Appraisers Are Insane -- to think of ways to cultivate new business. He recently managed to line up an appraisal of his mother's church. And he is starting to pick up appraisal business from lenders that have foreclosures they need to sell.
"This is the darkest moment I've ever gone through, but compared to other people who really suffer in this world, how can I complain because I'm not making more money right now?" Mathis said. "I just need to keep it in perspective."
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