Congresswoman Biggert promotes Appraisal Independence
In her Op-Ed piece for The Hill newspaper, Congresswoman Judy Biggert (R-ILL) argues for housing reform, including greater support for key appraisal legislation.
Additionally, Congress must address the shortcomings of the home-buying process that have contributed to the rapid rise in fraud and predatory lending. Without greater transparency and independence in the appraisal process, consumers will continue to be targets, and investors will continue to lack confidence in the value of financial products like mortgage-backed securities. When the integrity of the appraisal process is in question, everyone loses.
To address this issue, Rep. Paul Kanjorski (D-Pa.) and I have joined with Sens. Bob Casey Jr. (D-Pa.) and Mel Martinez (R-Fla.) to develop a bipartisan, bicameral proposal. H.R. 3837 and its companion S.2860, the Fair Value and Independent Appraisal Act, will add important disclosure requirements, prohibit deceptive practices and improve appraisal standards. The Senate should quickly act on this proposal, which passed the House on Nov. 15 as part of H.R. 3915.
While it is unlikely that Congress will act on this legislation by the end of the year, it is not out of the realm of possibility. And with housing still a top issue for the nation, I suspect there will be some activity in the coming months. The extent of that activity; however, remains to be seen.
Posted on September 16, 2008 12:32 PM | Permanent Link
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Marina Vialtsina
Showing posts with label appraisal. Show all posts
Showing posts with label appraisal. Show all posts
Monday, October 6, 2008
Thursday, July 24, 2008
Fed Issues New Lending Rules
Daily Real Estate News | July 15, 2008
Fed Issues New Lending Rules
The Federal Reserve on Monday adopted rules designed to protect homebuyers from the kind of loans that drove many into foreclosure.
The new rules apply to all lenders and not just to banks supervised by the Fed. Most are expected to take effect Oct.1, 2009. Escrow requirements won’t go into effect until April 1, 2010.
Here are the new requirements:
1.Prevent loans made without documenting borrower’s income.
2. Require lenders to escrow money to pay taxes and insurance for risky borrowers.
3. Limit and in some cases ban prepayment penalties.
4. Prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value.
5. Require mortgage advertising to contain information about rates, monthly payments and other features of the loan.
6. Insist lenders credit a mortgage payment to a home owner’s account on the day it is received.
7. Brokers and others are forbidden from "coercing or encouraging" an appraiser to misrepresent the value of a home.
Source: The Associated Press, Jeannine Aversa (07/14/08)
Fed Issues New Lending Rules
The Federal Reserve on Monday adopted rules designed to protect homebuyers from the kind of loans that drove many into foreclosure.
The new rules apply to all lenders and not just to banks supervised by the Fed. Most are expected to take effect Oct.1, 2009. Escrow requirements won’t go into effect until April 1, 2010.
Here are the new requirements:
1.Prevent loans made without documenting borrower’s income.
2. Require lenders to escrow money to pay taxes and insurance for risky borrowers.
3. Limit and in some cases ban prepayment penalties.
4. Prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value.
5. Require mortgage advertising to contain information about rates, monthly payments and other features of the loan.
6. Insist lenders credit a mortgage payment to a home owner’s account on the day it is received.
7. Brokers and others are forbidden from "coercing or encouraging" an appraiser to misrepresent the value of a home.
Source: The Associated Press, Jeannine Aversa (07/14/08)
Wednesday, April 30, 2008
Waiver vs. Cancellation
Consider this, if the Buyer does not complete the appraisal by the deadline in section 24, is it s deal breaker?
Not at all, this situation is a "Waiver" of the Buyers ability to use this contigency. In other words, the ability to return the earnest money back in case the appraisal is below the purchase price.
The contract though is still fully in force. Seller cannot sell the property again just because the deadline was missed.
Now, if the Buyer gets notice of the appraisal by the appraisal deadline, and there is a problem, buyer notifies Seller wihin 3 calendar days of receipt of the appraisal, then this would be "Cancellantion".
In summary, the waiver is something that could benefit me, but I am going to let it go, and not use it.
Cancellation is a clause that is a benefit to me....
Not at all, this situation is a "Waiver" of the Buyers ability to use this contigency. In other words, the ability to return the earnest money back in case the appraisal is below the purchase price.
The contract though is still fully in force. Seller cannot sell the property again just because the deadline was missed.
Now, if the Buyer gets notice of the appraisal by the appraisal deadline, and there is a problem, buyer notifies Seller wihin 3 calendar days of receipt of the appraisal, then this would be "Cancellantion".
In summary, the waiver is something that could benefit me, but I am going to let it go, and not use it.
Cancellation is a clause that is a benefit to me....
Tuesday, April 29, 2008
Appraisal Condition
To continue talking about Real Estate Purchase Contract:
As I mentioned before if you are a cash buyer, appraisal is optional tool for you. Otherwise, appraisal is a required continguency by your bank.
Keep in mind, however, that the bank role is to determine if the value of the property is not less than the Purchase Price. In other words, appraiser works for the bank and cares about banks' rights. Let's say if you know the property's value you are buying is way over the purchase price, most likely unfortunately, appraiser will not disclose this to you for this particurlar reason. You have a right for your own information purposes, invite appraiser who would be working for you.
I do not agree with some appraisal's rules. At the same time, though, I would like you to be aware of them.
If the Appraisal Condition applies and the Buyer receives written notice form the Lender that the property got appraised for less than the Purchase Price (a "Notice of Appraised Value"), Buyer may cancel the contract by proving this copy of such written notice no later than 3 days after receipt.
Date plus three days warning notice is exact as in Inspection Section. So, please see explaination in previous dates of this blog.
What is better to do inspection or appraisal first?
I would say inspection:
You can determine if you like the property, and if everything is fine in the property to start talking about it seriously. Usually, the inspection would cost cheaper if you pay on the spot to your inspector.
If Appraisal is completed, the appraisal fee would be included in your closing costs. And, by changing your mind, some mortgage companies will charge you not only appraisal fee, but cancellation fee as well.
As I mentioned before if you are a cash buyer, appraisal is optional tool for you. Otherwise, appraisal is a required continguency by your bank.
Keep in mind, however, that the bank role is to determine if the value of the property is not less than the Purchase Price. In other words, appraiser works for the bank and cares about banks' rights. Let's say if you know the property's value you are buying is way over the purchase price, most likely unfortunately, appraiser will not disclose this to you for this particurlar reason. You have a right for your own information purposes, invite appraiser who would be working for you.
I do not agree with some appraisal's rules. At the same time, though, I would like you to be aware of them.
If the Appraisal Condition applies and the Buyer receives written notice form the Lender that the property got appraised for less than the Purchase Price (a "Notice of Appraised Value"), Buyer may cancel the contract by proving this copy of such written notice no later than 3 days after receipt.
Date plus three days warning notice is exact as in Inspection Section. So, please see explaination in previous dates of this blog.
What is better to do inspection or appraisal first?
I would say inspection:
You can determine if you like the property, and if everything is fine in the property to start talking about it seriously. Usually, the inspection would cost cheaper if you pay on the spot to your inspector.
If Appraisal is completed, the appraisal fee would be included in your closing costs. And, by changing your mind, some mortgage companies will charge you not only appraisal fee, but cancellation fee as well.
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