While most financial experts feel that the debt downgrade will be felt in investments like stocks and bonds, what implications does it have for the real estate industry?

In commercial real estate, the greater impact could be on the demand side. Companies and consumers are already hesitant to spend; the downgraded U.S. debt will likely only increase that hesitancy. There could be a negative impact on consumer and business confidence, which could translate into lessened economic activity and thus reduced demand for commercial real estate, at least in the near future.

With regard to mortgages, most mortgage rates track the 10-year Treasury yield, which continues to fall. Adjustable rate mortgage holders could be slightly more vulnerable to economic impact, because ARMs are typically tied to shorter-term interest rate movements.

Either way, a negative economic impact like the downgrade is the last thing the sputtering real estate industry needed right now. As everyone has been doing since the start of the recession, we’ll just have to wait and see what happens.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

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The Debt Ceiling and Your Home’s Value

It may sound like an odd solution – especially for a bank – but that’s what Bank of America is planning to do with as many as 150 vacant and abandoned properties in and around Chicago. The plan is intended to aid the city by addressing the growing problem of abandoned properties.

As part of the new effort, Bank of America plans to:

• Register properties with the city when the mortgage is delinquent and the property has been identified as vacant and abandoned.
• Identify up to 150 properties that will be referred to a new Cook County vacant and abandoned building court call in an effort to speed up the foreclosure process and return the properties to stable, productive use.
• Contribute funds toward the city’s costs of demolishing deteriorating buildings on the donated properties.
• Donate foreclosed and vacant condominiums to the nonprofit Community Investment Corp. as part of an initiative to upgrade, preserve, and stabilize management of affordable rental housing.

Bank of America also recently held a mortgage modification outreach event, and opened a full-time customer assistance center in Chicago.

These and other initiatives “provide convenient opportunities for customers who are having difficulty making their mortgage and other credit account payments to receive face-to-face counseling, on-site processing, and underwriting of mortgage modification requests and other assistance,” the bank explained.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

Property Values in the Age of Foreclosures

Home Affordable Foreclosure Alternatives

Homeowners Foreclose on a Bank

But what’s so strategic about that? Nothing inherently. But these homeowners are not just walking away: they’re buying other properties that are better investments.

In the first half of 2010, an estimated 275,000 people (approximately 17% of defaulters) just walked away from mortgages they could afford to keep paying because the homes had become such terrible investments. That figure is down 35% from the first half of 2009, but as evidence of a double-dip housing crash mounts, the prevalence of strategic defaulting is expected to go up.

Whether you’re a traditional homeowner or part of this growing new class, the only way to know what your home is truly worth is to have an appraisal. Present Value LLC is always ready to help with that.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

Property Values in the Age of Foreclosures

Home Affordable Foreclosure Alternatives

Nearly 16 Million Homeowners Are Underwater

In the midst of the sorrow and loss, however, there is good news, at least for some. Freddie Mac, the government-sponsored mortgage backer, has announced that homeowners affected by the tornadoes who have mortgages owned or backed by Freddie Mac can take advantage of its full menu of relief policies. To be eligible, borrowers must reside in counties that were declared major disaster areas.

Freddie Mac’s disaster relief policies allow lenders the option to reduce or suspend mortgage payments for up to 12 months for borrowers who are affected by a disaster. Freddie Mac is also encouraging lenders to help affected borrowers by suspending foreclosure and eviction proceedings for up to 12 months, and waiving penalties and late fees against borrowers with damaged homes.

To view Freddie Mac’s general disaster relief policies, visit www.freddiemac.com/singlefamily/service/disastermgmt.html .

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

What Will Happen Post-Freddie and Fannie?

Obama Proposes Pulling the Plug on Fannie and Freddie

Fannie Mae Plays Hardball

As reported on Yahoo! News yesterday, retired police officer Warren Nyerges and his wife, Maureen Collier, purchased their home in 2009 for $165,000, which they paid for in cash. In February 2010, evidently through some glitch, Bank of America attempted to foreclose on the property – even though they’d never taken out a mortgage!

The couple hired attorney Todd Allen, and the bank eventually dropped the matter. But Warren and Maureen spent $2,534 in court fees, and they felt Bank of America should pay for it. The court agreed, but after several unsuccessful attempts to collect, the couple’s attorney filed foreclosure against the bank.

Allen arrived at a local branch of the bank with sheriff’s deputies, who he instructed to remove cash from the tellers’ drawers, furniture, computers, and other property. Less than an hour later, the bank manager produced a check for $5,772 to satisfy Allen’s fees and additional costs.

While a great story of the tables being turned, the fact that this glitch happened at all calls to mind the scandal that erupted not too long ago with so-called robo-signers, automated programs that banks were using to process a backlog of mortgage requests without being sure that the applicants were qualified. As such, it also underscores the importance of dealing with people you can trust, and having documentation that’s compliant and will stand up to scrutiny.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Fannie, Freddie, and the Federal Housing Administration (FHA) currently support more than 90% of new home loans. The Treasury report proposed the government’s main roles should be consumer protection, oversight of lenders, and assistance to low- and middle-income homeowners.

The Treasury blamed poor consumer protection, an overburdened and outdated regulatory system, and poor loan servicing practices for the recent housing market crisis. The report also pointed out that Fannie’s and Freddie’s current “profit maximizing” structure completely undermined their original mission of helping low-income and minority buyers purchase homes.

Experts believe that the FHA can’t carry the large loan market share it currently holds successfully for the long-term. “If (FHA) expands beyond its capacity,” the report noted, “it risks being unprepared to anchor the housing market should we suffer another economic collapse.”

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

Fannie Mae Plays Hardball

New Fannie Mae Rules to Prevent Inflated Appraisals

FHA Rule Changes Now in Effect

Approximately 15.7 million homeowners had negative equity – known as being “underwater” – at the end of 2010, up from 13.9 million in the previous three months. The total represented 27 percent of mortgaged single-family homes, the highest number dating back to the first quarter 2009.

As foreclosed properties sell at deeply discounted prices and unemployment remains at or near 9 percent, home prices continue to decline. “Values will fall up to 5 percent this year, putting more homeowners underwater, before finding a floor as the economy improves,” said Stan Humphries, Zillow’s chief economist.

The median value for a single-family home was $175,200 in the fourth quarter 2010, down 2.6 percent from the end of September and 5.9 percent from a year earlier. Values have fallen 27 percent from the June 2006 peak.

Foreclosures slowed in the fourth quarter as lenders halted some home seizures after accusations they had used improper documentation and processes.

If you’re concerned about the value of your home, be sure to arrange a real estate appraisal as soon as possible.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading

Decrease in Home Values Correlates to Increase in Homeowners Who Are “Underwater”
Foreclosures Across the Country Still High in 2010, but Down from 2009
Do-It-Yourself Real Estate Appraisals Can Cost You Dearly

Nevada has far and away the most troubled real estate market – foreclosure sales accounted for nearly 54 percent of all sales in the third quarter of 2010. While bleak, the number is actually an improvement over 62 percent of all sales in the third quarter of 2009.

Arizona foreclosure sales accounted for nearly 47 percent of all sales in the third quarter, but that’s a decrease of 32 percent from the third quarter of 2009. In California, foreclosure sales accounted for 40 percent of all sales in the third quarter, down 43 percent from the same time last year.

Other states where foreclosure sales accounted for at least one-quarter of all sales were Florida (37 percent), Massachusetts (35 percent), Michigan (32 percent), Georgia (29 percent), Oregon (27 percent), Idaho (25 percent), and Illinois (25 percent).

Make sure you know what your home is really worth. Call Present Value LLC and order an appraisal today!

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional Reading:
Property Values in the Age of Foreclosures

Home Affordable Foreclosure Alternatives

Foreclosure Fraud

The battered real estate economy is still sputtering, foreclosures are an everyday occurrence, and many homeowners are still underwater, so it’s hardly surprising that first-time homebuyers are scarce. Owning a home used to be looked at as an investment. These days, buying a house looks as risky as the stock market or a craps table.

There are several downsides to this home-buying aversion. The most fundamental is that neither the real estate market nor the mortgage industry has any chance of recovering if people aren’t buying. And because of the state of things, people who aren’t purchasing homes are missing out on rock-bottom property values and exceptionally low interest rates.

The one upside to all this is that rental properties are booming, and that will help the equally ailing construction industry — if demand stays high, there will be a need for luxury apartment complexes.

Present Value LLC is a worldwide international appraisal and advisory company that provides a range of professional services such as Certified Machinery and Equipment Appraisals, Inventory Appraisals, Asset Verification Services, Business Valuations, and Real Estate Appraisals. Contact us today!

By: Present Value

Additional reading:

Decrease in Home Values Correlates to Increase of Homeowners Who Are “Underwater”

Property Values in the Age of Foreclosures

First-Time Homebuyer Tax Credit Extension

There are some resources available for appraisers, however, to be better equipped to appraise in this burgeoning market. The Appraisal Institute, membership association of professional real estate appraisers, offers seminars and a certification program that can help appraisers value green buildings, including its upcoming webinar: Residential Green Valuation: Tools for Valuing High Performance Properties. The proposed Green Resources for Energy Efficient Neighborhoods (GREEN) Act legislation will mandate that appraisers have all relevant information about residential property – including plans and specs, green energy labels, and certifications and Home Energy Rater Score (HERS) ratings.

It is clear that green building is only going to become more popular, especially once the real estate market turns around; although it may take some time, appraisers will need to understand all the new complexities in this field of appraisal and adapt.

By: Present Value

Additional Reading:

Obtaining Loans for Green Construction

What Exactly Are You Doing, Appraiser?