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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

Don’t Shoot the Messenger: Appraisers Not at Fault for Low Appraisals

admin — Tue, 24 Jan 2012 20:58:32 +0000

The text below is taken from a one-page handout from the Appraisal Institute responding to the claim that so-called “low” appraisals are allegedly “killing” home sales.

Many in the real estate industry have tried to blame the market’s distressed condition on appraisers, saying that appraisers are at fault for producing opinions of value that don’t match a home’s listing or contract price, delaying a recovery in the housing market. In fact, appraisers are undertaking the same thorough research and thoughtful analysis that they always have in order to continue producing reliable, credible opinions of value.

Appraisals aren’t intended to confirm a home’s sales price.

Appraisals completed for mortgage transactions are used to assist lenders in making lending decisions. Buyers and sellers often have emotional value attached to a home or are unaware of the market. They shouldn’t assume an appraisal is somehow “wrong” if it doesn’t match the listing or contract price. There’s no reason to assume the contract price is the “correct” price simply because it’s higher than the appraisal.

Appraisers don’t set the real estate market; they reflect what’s happening in the market.

Think of the appraiser as a mirror, reflecting the market – and the market is depressed as home prices have fallen far below values of a few years ago. Reliable, credible opinions of value help stabilize real estate loans and investments, promoting socially desirable real estate development.

For the full copy of the handout, click here.

By: Present Value

Additional Reading

Fighting the Low-Ball Appraisal

High-Value Home Appraisals: 10 Tips

Improve the Value of Your Home

EquipNet Expands Equipment Appraisal Services with Acquistion of Present Value LLC

admin — Thu, 19 Jan 2012 13:31:33 +0000

EquipNet has acquired Present Value LLC–a worldwide appraisal and advisory company. Present Value co-founders, Christopher Kinzie and Christopher Spinelli, will join the EquipNet team at the company headquarters in Canton, MA and Present Value’s international roster of certified appraisers will now fall under the auspices of EquipNet.

Kinzie and Spinelli founded Present Value in 2006. They are both experienced appraisers themselves, certified through the National Equipment & Business Builders Institute (NEBBI) as Certified Machinery & Equipment Appraisers (CMEA). Additionally, they are both certified through the International Society of Business Analysts as Certified Senior Business Analysts (CSBA).

EquipNet’s President and Chief Operating Officer, Roger Gallo, is excited about the opportunities the merger presents. “Acquiring Present Value allows EquipNet to provide our clients with a wider array of appraisal services,” explains Gallo.

“Not only will we have a global network of on-staff equipment appraisers with expertise in all the industries we serve — pharmaceutical, biotech, chemical, and consumer processing and packaging,” says Gallo, “But in the future, we’ll be able to offer our clients business valuations and real estate appraisal services, as well.”

With the merger, Kinzie has become EquipNet’s new Director of Appraisal Services. Spinelli will head up EquipNet’s Category Management Department, bringing his knowledge and understanding of appraisals to enhance EquipNet’s specification gathering and valuation methodology.

Roger Gallo and Christopher Kinzie recently sat down to discuss the acquisition and what it will mean to EquipNet and Present Value customers. Check out the video. .

Can A Street Name Affect Property Values?

admin — Tue, 17 Jan 2012 13:51:45 +0000

“The Appraisal” column in The New York Times had an interesting article in it today titled, “On a Numbered Street, Apartment Owners Yearn for More Cachet.” The article describes an up-scale condominium building on 52^nd Street in Manhattan. Several of the condo owners in the building feel that their street name doesn’t accurately portray the luxury to be found in the building, and believe that changing the name of their section of the street to something a little more elegant will raise the value of all of the condos.

Beekman Place and Sutton Place are tiny streets in Manhattan that have elegant and ornate residential buildings, and saying you live on one of those well-known streets comes with a certain connotation. Residents of the co-op on 52^nd Street want to give themselves the same sort of bragging rights.

The question is, will a street name change actually improve the value of the property? Some experts say absolutely not, but others believe that a name change could give property values a small boost. Companies that track sale prices show that similar condos in similar buildings on nearby, more elegantly named, streets sell at a slightly higher price than the condos on 52^nd Street.

Stories like this one serve as a reminder that a great deal of factors figure into the value of a property. That’s why it’s so important to work with a reputable, experienced appraiser who can help you determine the value of your home.

By: Present Value

Additional Reading:

High-Value Home Appraisals: 10 Tips

High Credit Score No Longer a Requirement for Freddie Home Refinances

admin — Thu, 12 Jan 2012 21:16:05 +0000

Freddie Mac has eliminated the minimum credit score requirement for borrowers seeking a mortgage refinance from their current mortgage lender, provided the borrower has at least 20% equity in their home.

The change goes into effect for any refinances with a settlement date on or after January 5, 2012. Prior to this enactment, Freddie required a credit score of at least a 620 before allowing such a high-equity refinance to take place.

In October, the Federal Housing Finance Agency (FHFA) instructed Fannie Mae and Freddie to remove barriers to allow more borrowers to take advantage of historically low interest rates through the Home Affordable Refinance Program (HARP).

Since rates on most mortgages began 2012 still below 4%, government-sponsored enterprises (GSEs) like Fannie and Freddie removed upfront fees, limits on loan-to-value ratios, and certain representation and warranty risk on the old loan file.

By: Present Value

Additional Reading

Freddie Mac to Fund Apartment Building Loans

Fannie and Freddie Align

Fannie Mae Plays Hardball

Present Value LLC’s Top Five Posts on the International Financial Reporting Standards (IFRS)

admin — Tue, 10 Jan 2012 13:21:45 +0000

International Financial Reporting Standards (IFRS) is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS is issued by the International Accounting Standards Board. Conversations are still swirling over whether or not the Securities and Exchange Commission (SEC) will adopt IFRS or some variation of the standards, requiring U.S. companies to begin using the international reporting standards rather than the current Generally Accepted Accounting Principles (GAAP). We pulled together some of the most useful posts regarding the debate over IFRS.

Companies Will Need Time to Adopt International Financial Reporting Standards (IFRS)

SEC Releases Second Staff Paper on a Possible Incorporation of IFRS into U.S. GAAP: An Analysis of IFRS in Practice

IFRS Loopholes

More Delays on SEC’s Decision on Whether to Adopt IFRS

GAAP and IFRS

By: Present Value

Don’t Wait to Refinance!

admin — Thu, 05 Jan 2012 13:58:22 +0000

Many people took advantage of last year’s low interest rates and refinancedtheir homes. If you didn’t do it last year, the Federal Reserve promised to keep rates low this year, so there’s still time. However, according to a quote in The New York Times from Frank Nothaft, chief economist at Freddie Mac, interest rates might start to go up a little in the spring.

If you’re planning on refinancing this year, take action now. Begin to gather all of your documents, like pay stubs and W-2s, and check your credit report. And find an appraiser qualified to determine the value of your home. The appraiser you work with should be familiar with your area and know the rules from the Home Valuation Code of Conduct intimately. An appraisal that comes in too high or lower than you expected can derail your refinancing plans, so be sure that your appraisal is as accurate as possible. If you’re planning on refinancing in 2012, contact us today!

By: Present Value

Additional Reading

Is Refinancing for You?

Refinancing Options for Underwater Homeowners

An Explanation of the Anti-Flipping Waiver

admin — Tue, 03 Jan 2012 19:33:41 +0000

The recent announcement by the Federal Housing Administration (FHA) that they will extend the waiver of anti-flipping regulations through 2012 is welcome news to the entire real estate industry. But just what are “anti-flipping regulations” anyway?

First, let’s define flipping in this context. Property flipping refers to the practice in which a recently acquired property is resold for a considerable profit. Most property flipping occurs within a matter of days after acquisition, and usually with only minor cosmetic improvements, if any.

In May 2003, FHA and the Department of Housing and Urban Development (HUD) issued regulations stating that any home that was owned for less than 90 days could not be purchased by a buyer using an FHA-insured mortgage.

In 2010, in recognition of the housing crisis and given the large number of foreclosed homes sitting vacant, HUD and FHA realized that allowing investors to buy these homes, fix them up, and resell them quickly for a profit was not such a bad idea after all.

With the extension of the anti-flipping waiver, most investors are working on homes that are catering primarily to the first-time-buyer market. And restoring the value of run-down homes can rid cities of the foreclosure blight while improving overall property values.

By: Present Value

Additional Reading

Property Values in the Age of Foreclosures

Home Affordable Foreclosure Alternatives

Homeowners Foreclose on a Bank

Happy New Year from Present Value

admin — Sun, 01 Jan 2012 15:26:03 +0000

A New Year is upon us, and what better time to reflect upon the year that’s swiftly coming to a close?

At Present Value, 2011 was an eventful year, to say the least. We saw President Obama propose pulling the plug on Freddie and Fannie. There were additions to the real estate vocabulary: foreclosure mill, mortgage mill, and appraisal mill. We reported on the growth of the number of strategic defaulters in the market. There was continued debate as to whether or not the U.S. should adopt IFRS. And, of course, the big news was that Present Value went international.

As we move into 2012, we will continue to stay on top of the latest news and trends in real estate appraisal, as well as in machinery & equipment appraisal. And we’ll also continue to do what we do best – appraise!

A special thanks to all of our friends, colleagues, and business partners who made 2011 so memorable. On behalf of all of us at Present Value, we wish you a happy, safe, and prosperous New Year.

By: Present Value

Are You Planning to Sell Your Business in 2012?

admin — Tue, 27 Dec 2011 11:30:22 +0000

There was an interesting article in The New York Times this week that said if you’re planning on selling your business sometime in the next few years, 2012 might be the ideal time to do it. Some of the reasons it lists are the expiration of Bush-era tax cuts that could affect after-tax proceeds of a business sold in 2012, that there is money out there for acquisitions, and that 2011 was a pretty decent year for a lot of small businesses.

One of the reasons listed that we found interesting is that the market may soon be flooded with businesses for sale as Baby Boomers retire over the next 15 years. If the number of businesses available for sale outweighs demand, the value of those businesses could be adversely affected.

If you plan on taking the article’s advice and sell in 2012, remember that an important first step is to learn your business’s worth by getting it appraised by an experienced and reputable professional.

By: Present Value

Additional Reading:

Small Business Owners and Planning for Retirement

Some Tips if You’re Thinking About Selling a Small Business