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President Obama’s Refinance Plan

admin — Thu, 26 Jan 2012 20:50:40 +0000

President Obama delivered his state of the union address this week. During his speech, he announced his intention to send a plan to Congress that will allow all homeowners who are current on their mortgages to refinance. The Wall Street Journal today published “Six Questions on Obama’s Mortgage Refinance Proposal” to further explain his plans.

There’s been a plan in place for years that allows homeowners with Freddie and Fannie backed mortgages to refinance. The difference with Obama’s new plan is that it will extend to other homeowners as well. It hasn’t been made clear what loans will be eligible, but it is known that Congress will have to pass legislation to put this plan into place. Given that, some experts aren’t optimistic that this plan will come to fruition.

It is likely that the plan will use the Federal Housing Administration to allow any homeowner to refinance even if they’re underwater on their home or their income has fallen since their last time refinancing.

This plan is not an automatic refinancing, as many experts have called for. Homeowners who want to refinance through this plan will have to pay upfront fees and fill out all of the necessary paperwork before the refinancing can go through.

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

On Being Thankful

admin — Thu, 24 Nov 2011 12:30:59 +0000

This Thanksgiving, we’re thankful not only for our friends and families, but for all of our customers and supporters who make it possible for us to do what we love. From all of us here at Present Value, we wish you a wonderful holiday.

By: Present Value

Inheriting a Mortgage

admin — Tue, 22 Nov 2011 12:34:42 +0000

The death of a loved one can bring with it great sadness … and in some cases, a mortgage. The recipient of a deceased person’s home has a lot to think about. In some cases, the will might state that other assets should be sold to pay off the mortgage, but in others the mortgage payments can pass directly to the recipient. In this case, people often just sell the home, but emotional ties can sometimes make that difficult. If emotional ties are the thing keeping the recipient from selling the house, the best thing to do is order an appraisal to make sure that what makes emotional sense also makes financial sense. Unfortunately, warm memories of sitting around the kitchen table won’t help with the mortgage or home maintenance.

Some people who inherit an underwater home, or one that is worth less than what is owed on the mortgage, ask if they can simply walk away. They can do this with the estate taking responsibility for the bad debt, but the bad news is that other assets in the estate, like a second home, might be used to pay off the debt.

If you find yourself in this situation, be sure to work with a certified appraiser and an attorney skilled in these matters.

By: Present Value

Additional reading:

Refinancing Options for Underwater Homeowners

Estate Planning: What Legacy Will You Leave Your Family?

The Sensible Accounting to Value Energy (SAVE) Act

admin — Wed, 02 Nov 2011 02:22:22 +0000

A bill now making its way through Congress, the Sensible Accounting to Value Energy (SAVE) Act, is garnering a groundswell of support from those within the real estate appraisal industry.

Under the SAVE Act, federal loan agencies would assess a borrower’s expected energy costs when financing a house. The U.S. Department of Housing and Urban Development would issue updated underwriting and appraisal guidelines for any loan issued, insured, or purchased by the Federal Housing Administration (FHA) or any other federal mortgage loan insurance agency.

The bill establishes two methods for determining expected annual energy costs: average utility costs, derived from the Department of Energy’s Residential Energy Consumption Survey database and adjusted for the square footage of the home, or if available, a qualified, independent energy report of the subject property.

The SAVE Act would help protect taxpayers from another foreclosure crisis; lower utility bills for U.S. households; drive business and job growth in the construction and manufacturing sectors; expand the accessibility and affordability of energy-efficient homes; and reduce U.S. energy dependence.

For more information about the SAVE Act, visit the Institute for Market Transformation, a non-profit organization dedicated to the promotion of energy efficiency, green building, and environmental protection in the United States and abroad.

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:

Appraisers Seeking Resources to Determine the Value of Green Buildings

Appraisal Institute Acknowledges It’s Not Easy Appraising Green

Flooding and Your Home’s Value

admin — Tue, 13 Sep 2011 12:31:30 +0000

People are already a bit skittish when it comes to buying real estate, and water damage, even if it was only a little water seepage under extreme conditions, can kill a buyer’s confidence in a home purchase. Home owners dealing with water damage from major storms may be dealing with lack of buyer confidence for years if they try to sell.

Most homes prone to water damage have sump pumps and back-up generators, but sometimes even that isn’t enough to boost confidence. According to a recent article in The New York Times, a home in New Jersey was scheduled to close two days after Hurricane Irene. Because the seller mentioned that Irene caused the first instance of water seepage in the basement in 30 years, the seller was required to put money in escrow in case the damage got worse.

Buyers aren’t the only ones concerned about water damage; lenders are worried, too. Some banks require an appraiser to give a final inspection just before closing to inspect the house for water seepage. The lesson here is that no matter how infrequent or how minor, flood damage can adversely affect the value of your home.

By: Present Value

Property Selling Moves to Reality TV

admin — Wed, 01 Jun 2011 13:42:05 +0000

Brokers selling real estate have turned to reality television to give people a glimpse into their lives and help move property. Two new shows, “Selling New York” and “Million Dollar Listing,” which is based in LA, have added new elements to real estate agents’ marketing strategies. Recently, on “Selling New York,” the stars of the show threw a party to entice potential buyers to view a home that had been on the market for a while, and publicists, artists, and the mildly famous crowded into the loft to take a look. There’s some debate among the show stars whether they’re attracting potential homebuyers or just those seeking their 15 minutes of fame, but they don’t question that bringing more awareness to their companies is a good thing.

With the high profile of these shows, it’s very important that the values of the properties are portrayed correctly to the viewing audience. And it would be interesting to know what being featured on the show does to a home’s value. Perhaps the producers are looking for an appraiser to do a cameo?

By: Present Value

Additional reading:

When All Else Fails in the Real Estate Market, Try the Metaphysical

What You Can Do to Help Your Home Appraise Better

A House with a Past

admin — Fri, 08 Apr 2011 02:24:42 +0000

It’s like a real life Amityville Horror. There’s a beautiful house available in a fabulous neighborhood in New York with very little turn-over, but the house just won’t sell. A murder took place in the home.

The home was appraised at well over a million dollars, but the realtor has to keep dropping the selling price because prospective buyers can’t deal with the house’s terrible past. Any number of things affect the value of a home and the amount for which it can sell. That’s why it’s so important to work with an experienced appraiser who has seen it all.

By: Present Value

Additional reading:

Things That Appraise in the Night

Five Posts to Help You Navigate Your Business’s Taxes This Year

admin — Wed, 02 Mar 2011 03:08:09 +0000

Everyone’s favorite time of year – tax time – is just around the corner. Here are five blog posts that can help you as you begin to pull all your paperwork together to file.

Cost Segregation
If you are planning on buying or improving a building for your business, your CPA may recommend a cost segregation, which is an asset depreciation technique. This technique separates real estate into personal property, land improvements, buildings, and land, and then depreciates personal property and land improvements at an accelerated rate. This would reduce the building owner’s tax obligations.

Understanding Depreciation for Machinery and Equipment

The term depreciation has different definitions, depending on the audience you are speaking to. In accounting and finance, depreciation means the allocation of the cost of an asset over time. It is a way of allocating the purchase price of an asset across its useful life, which takes into account what is considered normal wear and tear over the life of an asset. For the appraisers of machinery and equipment, the term means something different. It is the estimated decrease in value from the initial purchase price of an asset based on a number of criteria, including physical, functional, and/or economic factors.

Appraisals for Gifts

Any time a piece of equipment worth more than $5,000 changes hands as a gift or charitable donation, a certified equipment appraiser must perform an inspection for tax purposes. The IRS requires that in the year the gift changes hands, the donor must include with his or her tax return a copy of an appraisal certifying the fair market value of the property that was gifted.

Charitable Contributions

If a company contributes its services to a charity, it is not entitled to a deduction for those services, but can deduct non-reimbursed expenses incurred in rendering them. If a company contributes cash, it may deduct a contribution that is up to 50% of its adjusted gross income. If the company contributes appreciated property (a property that has experienced an increase in value), it is entitled to deduct the value of that property for that tax year.

The Pension Protection Act of 2006

The Pension Protection Act of 2006, signed into law in August 2006, was designed to help Americans protect and grow their retirement savings. The act includes discussion about tax incentives and regulations for pension and charitable giving reform. Those who engage in charitable giving are eligible for tax deductions, and there are rare cases in which charitable giving moves a donor down a tax bracket, which would require that they pay fewer taxes.

By: Present Value

Present Value’s Year in Review 2010

admin — Thu, 30 Dec 2010 23:49:47 +0000

As we bid farewell to 2010 this weekend, it’s important to reflect back on all the things that we’ve seen and learned this year. To start, check out New Year’s 2010 blog.

January seems so long ago, but we saw the FHA change its rules for home borrowers, raising its upfront mortgage insurance premiums. In February, the SBA, after running out of economic stimulus money, established a waiting list for small businesses seeking credit. In March, the SBA received additional funding through the temporary jobs bill and loan incentives were reauthorized.

In April we presented both sides of an argument, one blaming appraisers for the mortgage crisis, and one absolving them. June was a busy month, one in which it looked as though the HVCC was not phasing out toward the end of the year as planned, and the oil spill in the Gulf of Mexico impacted appraisal values.

July saw the passing of The Dodd-Frank Wall Street Reform and Consumer Protection Act, the first overhaul of appraisal regulations since the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989. In August, we examined the issue of property values in the age of foreclosures, and in September we took a look at foreclosure fraud.

In October we presented a primer on liquidation, Liquidation 101, and last month we spent quite a bit of time explaining the differences between and importance of GAAP and IFRS. This month we reported, among other things, that mortgage rates are rising.

This is, of course, just a snapshot of the information our blog had to offer in 2010. We encourage you to take a look through the Present Value LLC blog archive and see what else this year held.

What will we see in 2011? It’s anyone’s guess. But we hope you’ll continue to join us as we look into all things appraisal.

On behalf of all of us at Present Value LLC, we wish you a happy, healthy, and prosperous New Year!

By: Present Value

Additional reading:

New Year, New Planning

More International Financial Reporting Standards (IFRS) Information Is Available

admin — Wed, 24 Nov 2010 02:35:54 +0000

We’re still receiving phone calls from people looking for IFRS information. It’s a pretty new concept for people in the United States and there isn’t a lot of readily available information, so we’re working to educate our clients as information becomes available.

As we discussed in our first post on this topic, IFRS will replace GAAP reporting standards if the SEC decides to adopt the IFRS international reporting standards in the United States. IFRS requires that a company’s balance sheet recognize all allowable assets and liabilities under IFRS reporting standards, re-classify items that were previously classified under GAAP, and apply IFRS standards when measuring the value of all assets, which requires a certified appraisal.

Because it isn’t certain whether the SEC will decide to adopt IFRS standards, it is advisable that if you need an appraisal, you work with an appraisal company that is familiar with IFRS. That way, if the standards are accepted and you need reporting that adheres to IFRS standards on your balance sheet, it will be available to you. It will also help you adopt the standards ahead of any SEC decision if you so choose.

Present Value LLC has performed machinery and equipment appraisals worldwide, so we are familiar with IFRS accounting principles used in other countries. If any questions about these standards arise, please contact us and we’ll help you navigate these changes as more information becomes available.

By: Present Value

Additional reading:

GAAP and IFRS

Experts Recommend Companies Adopt IFRS Standards Ahead of SEC Decision