Reinstating Seller Paid Down Payment Assistance - 07.29.10 | First Priority Financial AZ

angel040574: (August 02, 2010 12:25pm)

HR – 600 - KEEP IT DEAD!!! 1. The tax credit – 70% may have stated that they would have bought anyway, but let’s face it – the credit got them off the fence. It may have cost $12.6B, but a large chunk of that came back in the form of income to LOs, title companies, Realtors, attorneys not to mention transfer taxes and recording fees 2. Lack of “skin in the game” is proven to be a bigger indicator of default than credit scores. 3. The tax credit required that the buyers HAVE “skin in the game” before the transaction could close. It was “reimbursed” at a later time, assuring that the borrower had the funds to get into the house to start with, and then padded them for repairs, purchases and (heaven forbid) reserves after closing. It didn’t bear with it the risks of the seller DPA programs that helped to propagate the excessive value increases and qualify the unqualified. 4. 5Pence – money is not printed by banks. Go back to the 8th grade. Secondly – most of Obama’s budget is the “Appropriations” to take care of Bush’s budget, Bush’s 2 wars and Bush’s fiscal stimulus package. Look it up. The damned package passed in 10/08 – bef

jplapf: (July 30, 2010 8:32am)

The attempt to harm new homeowners by utilizing "special and creative" financing of the past to boost sales and affect the value of real estate is not the way to fix the problem. FNMA definition of market value: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, assuming the price is not affected by undue stimulus. FNMA/FHLMC created the "undue stimulus" when they began purchasing the "special and creative" mortgages and creating "special and creative" mortgage product of its own. The time has come to allow the real estate market to return to the supply/demand equation for determining value to qualified home buyers.

5pence: (July 29, 2010 11:31pm)

Yeah sorry godlike, you're buying into the "show" when political is really not defined by less than ideals of the common man. What you describe as political is nothing more than a stage play by very bad actors

GODLIKE: (July 29, 2010 8:06pm)

The whole issue is political. You can't avoid it. If I were PC I'd say some mealy mouthed thing that really wouldn't address the issue.

Cory: (July 29, 2010 7:05pm)

@GODLIKE Nice way to drag this into a political, anti-Liberal discussion. Gonna compare Liberals to Nazis next?

GODLIKE: (July 29, 2010 6:51pm)

In other words it would cost them votes so that's never coming out of a Democrat's camp.

GODLIKE: (July 29, 2010 6:51pm)

A 5% downpayment would also be perceived as a negative to that group of people who predominately vote Democratic.

5pence: (July 29, 2010 5:20pm)

Yeah, lll Appraiser. I been in this college of appraising for over 20 years!! I'm a freaking PHD of appraising by now!! That's right - Dr 5pence!! heheeh. Does that matter? Not if they can rip you off by denegrating your skills. For instance "reasonable and customary fees" could ONLY refer to valuing homes that are exactly the same, if you think about it. Not!! They're like snowflakes, no 2 the same. Whole industries have grown around ripping off the appraiser, from Appraisal port ripping the data because they're too cheap to buy the MLS in the 90's (and now we have to pay them for the privilege of them ripping our data), to deminimus raising to $250k, to AIReady, licensing, BPO's, AVM as the gold standard, and now to AMC's for the finishing touches. They're going to keep ripping us off until there's nothing left. What a shame & real waste of talent. The de-evolution/deconstructing of the appraisal profession by those that have never had a real job. There is no honor among thieves.

Ill Appraiser: (July 29, 2010 3:21pm)

And did I forget to mention that they also don't know that there are many middlemen taking a portion of my once nice fee, not exhorbitant, but nice.

Ill Appraiser: (July 29, 2010 3:19pm)

Oregon But most consumers have no clue what is going on. They just go with what they're told by the bank. "An appraiser will be calling you to come see your house." Most homeowners I see now don't know that I will be taking photos of everything, needing access to every nook & cranny, etc.

Oregon CR Appraiser: (July 29, 2010 3:15pm)

5pence, you crack me up! Yes, corporate and political greed is quickly killing this country from within and I don't know how we're going to get on top of it. Yes, many of us realize how the greed factor often trumps what many of us know to be "right". During Oregon's emergency Feb.2010 legislative session, I encouraged other appraisers to email specific requests to our legislators. I smile every time I think how we overwhelmed the Capitol's mail server right before the last voting session. Although we were unsuccessful in this last session, we'll try again... to require all county recorders report a true CASH price of just the real estate, in addition to any reported transaction price. If we could accomplishh this nationally, is the only way I can imagine it would work on a national basis (sorry if I missed reading other ideas). That way all aftermarket data providers would be accurate too; however, I don't see this ever happening.

Oregon CR Appraiser: (July 29, 2010 2:52pm)

And if that doesn't work, whenever an appraiser calls for inspection the borrower can tell them they don't approve of out-of-area appraisers and if they're not a local appraiser, they will turn the report in to the state appraisal board. Most appraisers will immediately cancel the order and after a couple cancels, the AMC will likely choose to pay the higher fee to engage a local appraiser. All anyone really wants is to feel like they're getting the quality product they paid for in the first place and $550 is no small change. I also think few customers want to feel bullied- especially when there’s so much competition out there right now. ;)

5pence: (July 29, 2010 2:43pm)

Oregon CR Appraiser: That's why I say take care of those concessions up front when you have the purchase contract and see what's going on with the deal. If you don't, the concessions get buried or hidden and if the banks don't want you to find them, because it won't make value if you do, then to keep your job you won't look very hard. Nevermind realtors that have an interest in keeping those concessions hidden, ie... more sales down the street that need this one sale at the inflated price to justify the higher price of the next listing there. Too much goes on after the sale, we need to nip that crap in bud and mandatory market testing the seller concessions at the time of sale would do just that. It's fair and almost fool-proof. But the AI boys say the market is perfect and laugh at such suggestions. IMO, it's a scam to influence the market upwards and to try to create more investor demand. Investor demand is fine, but do it all above board. $ 4 $. Dodd, what a crook & bank shill.

Oregon CR Appraiser: (July 29, 2010 2:30pm)

To KDMorgan and others who are tired of getting out-of-area appraisers pushed onto them.... FNMA just announced (6-2010) that only appraisers with existing local experience and for property type being appraised should be used. Many AMC's now require the appraiser be physically located within 20 miles of the subject and for some areas like San Francisco, within the subject county. Borrower or LO can also tell either LSI or the Lender that the borrower pays for the appraisal fee and although the borrower doesn’t want to dictate which appraiser to use, they will change lenders if they can't get a local experienced appraiser. Asking for a local appraiser is NOT being unreasonable. What is unreasonable is LSI and other AMC's who can charge $550 and use their $145 out-of-area appraisers... often because local appraisers want to charge a living wage. (That’s where this is likely coming from.)

Realtor Robert: (July 29, 2010 2:17pm)

I thought that this was to good not to share; In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn.) proposed that borrowers be required to make a 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, "passage of such a requirement would restrict home ownership to only those who can afford it." I can't add anything to this

Oregon CR Appraiser: (July 29, 2010 1:57pm)

Point #1: I think it inappropriate for any appraiser to discount a $10,000 seller paid cash concession of a comparable by using "tricky-dick" data to make a market grid adjustment reflecting it only impacted a sale by (for example) $2,000. I've seen it before in review work and it's pure BS. If a seller hands over $10,000 cash, then it impacted the transaction by $10,000. The helpful info in the FNMA definition of market value regarding how appraisers can consider contributory value of concessions, was never intended to be used to somehow prove a $10,000 cash contribution isn't worth $10,000. Point #2: 5Pence and others are correct in that concessions in general and especially concessions purposely hidden from appraisers, inappropriately raise local values. I view hidden concessions as ommission of a material fact by the selling agent/broker that (they realize) will be used by appraisers to overvalue property. Isn't that the basic concept of an illegal flip?

ncfella: (July 29, 2010 1:42pm)

Seller paid downpayment is nothing more than 100% financing. Call it what it really is. Period. Do you think the buyer has skin in the game because the seller paid his downpayment? No, just once again inflated the values in the neighborhood. Just go with a 100% program with slightly higher upfront or monthly MIP. Make the credit score requirements higher. It is not rocket science.

gsuarez1: (July 29, 2010 1:27pm)

Wow, thanks for finally jumping aboard this wagon guys- looks like you've been reading Jeff Belonger's posts. Some of us have been pushing for the return of SFDPA's all along. Without layering risk they can be a very effective way to clear the biggest hurdle of homeownership.

5pence: (July 29, 2010 1:10pm)

Value intrinsically stays the same. It's how that value is measured, through the confidence game we call dollars measured to infinity or through a finite standard, such as gold/precious metals, where there's a limited supply in the world. The Federal Reserve managed to make gold and silver coins not legal tender-only their fiat dollars are legal tender here. Say you've got an ounce of gold worth $1,200. The value of the gold as measured in dollars depends on how many $$$ are chasing that gold. Too many $$$ chasing it and the value, measured in dollars, goes up as there are too many dollars chasing too few pieces of gold. Something else. The hidden tax known as inflation. Your home is worth $300k. Soon more dollars are printed and the price of everything goes up meaning that your $300k house, if it's not keeping pace with inflation, is now really worth $250k. Where does that $50k go? It goes to the ones printing the money-banksters. A hidden tax. That is what just happened to everybody.

ehilliard: (July 29, 2010 1:05pm)

Valueboy, if the value aint there, it aint there, but if the home IS worth 200,000 and the Seller is willing to give 12k, then better him than me and you via TAX Credits.. Right!

Jim in Atlanta: (July 29, 2010 12:51pm)

I have been saying this since the DPA went away 1.5 yrs ago. I also believe that a 680 credit score should be required. This is just common sense.

Jim in Atlanta: (July 29, 2010 12:50pm)

I have been saying this since the DPA went away 1.5 yrs ago. I also believe that a 680 credit score should be required. This is just common sense.

Valueboy: (July 29, 2010 12:49pm)

DPA's are the dumbest idea ever, they alway have been and always will be. Here's the typical DPA transaction. A house list for $200,000 and nobody wants to buy it at that price. So the realtor reduces the price to $190,000. Still nobody. The realtor reduces it again to $180,000. Still nobody. Then, suddenly, out of nowhere, a buyer offers $200,000 with the seller kicking in 6% ($12,000) to a DPA program. As an appraiser with more experiance than god, I use the best comps available and find that the house is really worth $170,000 and turn in my report. Of course the Realtors and Loan Agents have a cow and they are shocked by my "low ball" appraisal. So lets see, if nobody was willing to pay $190,000 or even $180,000 for the house, why is it suddenly worth $200,000? The answer,it's not, and that's why the whole DPA concept is a joke and why all the previous DPA programs went down in flames.

carloslsutter: (July 29, 2010 12:12pm)

DPA makes more sense now than before, because, mortgage payments are lower than rent (to a large extent for people needing DPAs); that's better than any "skin in the game" equivalent. Improve guidelines like better ficos, more like 660, and we actually would have an extra big motor behind any recovery.

5pence: (July 29, 2010 11:46am)

Nobody tell Obama what number comes after a trillion. Agreed? :^)

5pence: (July 29, 2010 11:44am)

Nice work guys, refresh the screen in IE and the video plays. My favorite TV show. Need a weatherman?

5pence: (July 29, 2010 11:37am)

Congrats mdeery and I totally agree, The 11% must be the top 11% in wealth in this country that didn't even notice a recession. Vote in corporate sponsored candidates and you are voting in a corporation - not a person. How about we all elect normal people, blue jean wearing working class slobs like us that really know what's going on instead of millionaires that never had a real job in their lives. What a novel idea! Do you think that's what the Founding Fathers had in mind? I do. @jcollins. 20-40% appreciation a year is crazy!! Wouldn't you agree? What that appreciation basically means is not appreciation of home values but a loss of value to the dollar due to dilution. We need a more stable dollar, maybe grounded on precious metals? and certainly not at the whim of the Federal Reserve that creates these bubbles and busts by inflating the money supply and then contracting it. A dollar in 1913 is now worth 4 cents - thanks to the Fed Reserve.

Gmoney: (July 29, 2010 11:33am)

Who can do a 1031 X in Clovis N M. My email is gregjpfm@gmail.com. MArk Brian, come back in of the ledge, you might fall.

RESTReport: (July 29, 2010 10:51am)

The REST Report shows whether it is in the financial best interest for your investor to modify your loan, and it tells you whether you should qualify for a modification under HAMP. www.getrestreport.com

mparic: (July 29, 2010 10:46am)

The video playback issue some of you experienced today was due to a bug in Internet Explorer's Javascript processing; no other browsers were affected. A workaround has been uploaded so if you insist on using IE, reload the page and the video will play. Thanks for everyone's patience.

jfeinhandler: (July 29, 2010 10:44am)

I think that if people don't have the 3.5% downpayment they should not be buying a house. The last 4 years has shown that not everyone should own. If someone is serious about buying they will and can make the changes needed to save the down.

mdeery: (July 29, 2010 10:39am)

Here is a shocker..only 11% of Americans now have faith in our congress and elected officials!! what I want to know is, who the hell are these 11%? should be .001%. They are all a disgrace. Passed the state and Federal licensing yesterday, it was a breeze so not sure what people are talking about with the high failure rates?

Don92037: (July 29, 2010 10:27am)

Guys, I LOVE TBWS!! First posting. Yeah, video is not working today, but I did do the poll. Keep up the good work, and thanks for mentioning Jeffrey Gittomer on a regular basis. I use a lot of his advice.

jcollins: (July 29, 2010 10:16am)

5pence, Are you saying that that is the reason we had appreciation. Are you saying that that is the only way to get appreciation. ????????? WHy did they not took off the tax credit. Many buyers paid more for a house becasue of it. Just becasue the seller is not paying for it directly. It is pretty close to the same thing. It is an incentive to purchase.

5pence: (July 29, 2010 10:14am)

OK, I need to clarify. It takes more than just 1 poor appraisal to inflate values. All down the line there has to be appraisers that don't take into consideration the concessions of that comparable sale. But, consider that the banks will not keep you if you don't make value so they can do the loan, and there is extreme pressure to keep escalating values. None of this could happen without the banks pressuring appraisers to make value. So, even good appraisers will just go along with the flow to keep their jobs. If it was mandatory to adjust seller concessions dollar for dollar from the comparables at the time of sale while you have the documents in your hands, it would clean up the market so that no new comparable sales would enter the market with excessive concessions that weren't market tested. Even skippy can't screw that market up and inflated values would not happen. But, no one listens. The market is perfect - what a joke.

Cory: (July 29, 2010 10:10am)

@tbwbrian and others: You can also use the add-on IE Tab if you have certain websites that need to run in an IE environment. IE Tab runs inside Firefox so that you don't have to have two browsers open.

MortgageLaw: (July 29, 2010 10:07am)

There is validity in the discussion on how to make a home more affordable and assist a homeowner's purchase without increasing debt. If we agree that an incentive in addition to skin in the game will increase home sales and affordability maybe it is not the intent that is the issue and instead the problem is the vehicle. We are focused on the problem of Seller's concessions and appraisals being key factors to make Seller Paid DPS work. What is there is a different vehicle but same result? There is a security instrument out there called HEFI, Home Equity Fractional Interest. It is being used by major servicers as well as Real Estate Investors to effect exactly this strategy. I invite you to look for yourself. http://slidesha.re/bQ9gUR

5pence: (July 29, 2010 10:05am)

It works like this. A seller raises the sales price to cover their concession by 3%. A skippy appraiser that doesn't know what they're doing comes along & values it 3% higher than it should be. It sells & now becomes a benchmark value for appraisers for that neighborhood and all prices potentially rise 3%, per year, if all homes there take over a year to sell. Think of this in terms of 6% and it's the same thing-except that values excalate faster. All due to 1 poor appraiser. Throw in flippers and that 3-6% per year all of a sudden becomes 3-6% every 6 months. Now it's 6-12% a year appreciation. Now think of them flipping every 3 months with the same concessions. High seller concessions, property flipping & poor valuations that didn't take into account these concessions did lead to escalating values. It's the conclusion of many that seller concessions are what raised values across the country because appraisers did not or could not account for them. I say adjust $ 4 $ at time of sale.

tbwbrian: (July 29, 2010 10:04am)

the problem appears to be with explorer. if you use a different browser you'll be ok. i recommend that you download firefox and use that. by the way firefox is easy (couple clicks) free and BETTER anyways. thanks and sorry for the snafu.

5pence: (July 29, 2010 9:52am)

bmc: I think it's great what you're doing. Appraisers are jacking up their fees? Maybe to remain competitive with what the amc's are charging? Fees, because of amc's, have risen $100-$300, and more, over the fees that just the appraiser would charge. It sounds to me like you are not using the most experienced appraisers if they're incentivised to bring in low values. The appraiser you described comparing apples to rust would not have lasted a day in my office. Pare down your appraisers and accept new apps from experienced appraisers. It doesn't sound like you're using experienced quality appraisers IMHO. There's a huge supply of appraisers out there, don't settle for the first ones through the door. They might be doing amc appraisals on the side or running an appraiser mill. You should know quality work when you see it & don't settle for less than the best. I feel sorry for your situation and I hope you can change it. The sooner the schleps are gone the better it will be for all of us.

jcollins: (July 29, 2010 9:49am)

So, am I to understand that an apprasier will go over the highest comp in the neighborhood. Seems to counterdict the previous writtings. Glaad to hear there are at least a few appriasers out there that understand this.

Crosstown: (July 29, 2010 9:44am)

jcollins - Appreciation occurs in many ways. First, there are physical differences between properties that make them worth more than the others. Second, a reasonable increase in list price coupled with a reflective increase in sale price (where the buyer has agreed, based on other listed homes they've looked at) that is above the prior comps - is indicative of natural market-wide appreciation on the grand scale (i.e., time adjustment - this is why a house bought for $90,000 in 2000 will sell for $100,000 today with no changes to it). It seems like Realtors are always trying to inch-up the next list price - this is called testing the market. I know it's complicated, but working with comps is not so black and white. Perhaps someone else can explain it better.

jcollins: (July 29, 2010 9:43am)

Before HVCC I had never lost an appeal. Now it is about 50%. Mainly due to the fact that the appraiser believes that they are right and that there can be no other opinion. Appraisals are only opinion of value not the exact values. But, maybe the writttings below gave a better answer. They are affraid to give real values. Case in point. Had a house on the river. Appraiser used comps that did not back up to the river. Except one that was near the subjsct and would look like a good comp. except that it back up to park parking lot and was more then 4 times the distance to the river. He gave the property a value of $500,000 i agrued for higher should of been at least 700, to 800k. We only needed $550,000 so I went for it and got what I needed. The kicker, The house next door 300 sqft. bigger. (within 10%) sold for over 1mm. 3 months later.

MissMeghan702: (July 29, 2010 9:37am)

I can't see the video either =( However, I think it was genius (note: sarcasm) to eliminate DPA and turn around and start giving away tax-payer dollars to assist people to buy a home. I'd much rather see it negotiated within the deal. I thought the reason they eliminated DPA was because they wanted buyers to be invested in their homes - only to turn around and give tax dollars(money we clearly don't have to give -US currently has $1.17 trillion deficit and $14 trillion debt) to incentivize people to buy. I'm sorry but with record low prices and interest rates... did these buyers really need any more incentive to buy a home?

5pence: (July 29, 2010 9:36am)

kdmorgan: If the banks were paying for the appraisal they could choose whoever they want - they are at first paying for it but the homeowner ultimately pays the bank for the appraisal. It is the homeowners money so they should be able to accept or not accept the appraiser the banks send out. Certainly if they're not from the same county and don't know this person's market. The consumer does have the right to protect themself when they are paying for the appraisal!!!!! I hope that helps. Nothing in HVCC takes away ALL consumer rights when they're the ones paying. Talk about illegal - how they could they have let it stand for this long. @jcollins: Bracketting values. In neighboring subdivisions there's usually one that's higher quality to a more of less degree. If your subject is the highest valued in their development, the next one over could be used to bracket the higher value - if appropriate. Appreciation happens as does depreciation. They always will. The market fluctuates

cpappraisal: (July 29, 2010 9:34am)

jcollins-To answer your question in regards to appreciation. Simply put. Buyers have to start comming out of pocket for the difference in the appraised value. Once that starts to happen then appreciation starts to happen.

bmcdonald: (July 29, 2010 9:32am)

The problem with HVCC is that appraisers are not held accountable We are seeing appraisers jack up their fees. I write loans for the nation’s 15th lender by volume and our appraisers get ALL the money as we have an internal appraisal desk (AMC) that does not keep a penny. Worse than the fee thing is that appraisers are incentivized by HVCC to bring in the most CONSERVATIVE value possible…….not optimistic….not even realistic…..CONSERVATIVE…….. This is NOT their fault….they want to stay on the approved lists and keep getting work…the last thing they want is to have one of their values questioned. UNFORTUNATELY this does not serve the public. I’ve seen appraisers use tract homes in a rough neighborhood to compare with a larger custom home on a golf course sitting on a double lot. It’s BULL POOP and we can’t do anything to protect our borrowers. The appeal process is a sham. Basically our only option is to go back and ask the same appraiser to reconsider the value…. OF COUR

jcollins: (July 29, 2010 9:32am)

Mozilla Firefox, works great. Thanks Frank. How is your grand daughter doing?

frankgaray: (July 29, 2010 9:24am)

Again if you're having trouble viewing today's show, try refreshing, or using Firefox over Explorer. Our programing team has heard you loud and clear and is checking into it. Hang in there and have a great weekend.

APRAYZR: (July 29, 2010 9:21am)

Banks are exempt and are able to use their inhouse appraisers who are on their payrole or request a lapdog (approved) fee appraiser of their choosing. All of the above are a violation of the ethical concept called conflict-of-interest and defies the regulations stating that appraisals should be conducted by an independent third party. This has been going on for years so don't waste your breath or energy trying to bring this to the attention of "the authorities" or you will just incur their wrath by pointing out something that they have been deliberatly avoiding. The banks are the sacred cows of our society and you, if a broker or appraiser, are a second-class citizen.

jcollins: (July 29, 2010 9:19am)

GaryGracia: Good for you. Wish you could of made a n impact though.

jcollins: (July 29, 2010 9:17am)

5pence: What??? Explain that again. I am a little slow. My question was how do we get appreciation?

GaryGracia: (July 29, 2010 9:10am)

Yes, I'm that guy. The only REALTOR (and i'm on the CA state board of directors) who argued against the Federal Tax Credit at it's inception and during it's extension, for all Frank's reasons. Bravo, Boys!

jcollins: (July 29, 2010 9:10am)

kdmorgan: How high up the ladder did you go with both WELLS and LSI. Did you ask LSI why the could not find an appraiser that is closer to the property? I would think that they are correct in stating that the are th eones that get to chose. But, that they should be big enough to have appraisers in the area. IS it because of price?

Tammyc: (July 29, 2010 9:09am)

Hey guys, where is the video?

5pence: (July 29, 2010 9:02am)

kdmorgan: The borrower is paying (overpaying considering the AMC 60% cut) for the appraisal so they get to pick who they want. Screw LSI. HVCC is illegal, that is why they're getting rid of it & are going to review how it harms small business and the consumer. If I'm paying for the appraisal, I at least get to choose from what county the appraiser is picked. There is nothing in HVCC that doesn't allow for that consumer choice. @jcollins. With 3% seller concessions prices will rise 3% a year. For years this area saw 3% rises in value until 2005 and up. That's when concessions & the rise of the number hitting amc came into prominence. As far as seller concessions, I have a fix but no one will listen to it. They think the market is perfect. We should know it isn't. Seller concessions should be subtracted $ 4 $ from the comps. That is the test to see if the subject seller concessions are market supported. If that were done, any seller concession amount could be market tested. It works!

Mtgboss33: (July 29, 2010 8:54am)

Who ever said commone sense was dead on, and someone else mentioned how VA loans have such a low default rate in comparison to other loan. Another thought is to look at the USDA loan program which has the lowest default rate in the country across the board, and there are no down payments, no limit on what costs the seller can pay towards buyers costs, and we can finance costs into the loan if the appraisal is higher than the purchase price. If it were about skin in the game then the default ratios should be off the charts...right???

nxlab: (July 29, 2010 8:47am)

No video today!

kdmorgan: (July 29, 2010 8:32am)

HVCC, i know it's been covered but I need clarification. My client turned down an appraiser from So.O.C. to appraise his house inS.F.Valley, LSI says a borrower has NO RIGHT and Wells won't do allow another appraiser. They are quoting HVCC rules that state only they have the right to send any appraiser from any area if they feel the appraiser is qualified. Is this correct? I need ammo

jcollins: (July 29, 2010 8:13am)

I have a question for the appraisers. How does a home appreciate in value? If you are not allowed to go over the current comps. How are we ever going to get higher values?

joecolorado: (July 29, 2010 8:03am)

Cory-you hit the nail on the head-common sense.....unfortunately common sense is for the common man not for or from politicians.

Cory: (July 29, 2010 7:46am)

If not having skin in the game is a problem with foreclosures, than why does VA have a default rate less that half of conventional or FHA loans, and less than a quarter of subprime loans? The way I see it, the problem isn't "having skin in the game", its underwriting that allows 50% plus DTI's based on gross income whereas VA looks as disposable income after debt and utilities. That's common sense.

loanhack: (July 29, 2010 7:45am)

Living in the land of negative equity, I wonder who (or is it whom?) would be able to use the program other than new home builders? In the brave new world of appraisals, sellers wouldn't be able to bump the sales price to compensate for the contribution.

signjml: (July 29, 2010 7:38am)

No video !!

Joebob: (July 29, 2010 7:34am)

Missing my vid guys. Also, "skin in the game?" Sure, we all want it, but sometimes it's just not possible. Big difference now with DPA, is that everything's documented, and scores will have to improve. That, and the fact that these loans have only a slightly higher default rate under the old guidelines make them winners. Also, it would be better to erase the "charitable" (bogus) nomenclature, and these are respectable programs.

joecolorado: (July 29, 2010 7:31am)

appraised value is what it is....its never below the sales price and its never above the sales price its also not dead on the sales price it is what it is....the MARKET(value) and value should be derived from the market(there is no direct link between sales price,cost and market-NONE).Sales concessions,as Realtor fees,are NOT adjusted if they are"typical"of the market.If the"typical"fees are $3000 and the Realtor gets $5000 then that is atypical and an adjustment is made to"typical",similarly with sales concessions.The debate is whether the adjustment made for atypical"concessions"should be adjusted on a dollar for dollar basis,that figure is also gleaned from the market.The data must be available to make those decisions,thats why the appraiser telephones the Realtor to ascertain these financial figures.Contrary to public belief,we are not just pretty faces......we actually have to do some work at times.

GODLIKE: (July 29, 2010 7:27am)

DPA is evil no matter how you slice or dice it. Like Brian said, if you don't have any skin in the game then you walk if times get tough. Not everyone deserves to own a home. Having a savings program is really one good way to ensure the people have the elemental money skills necessary to own a home and maintain the payments long term. Putting chronically homeless people in homes is a good way to ensure . . . . well I don't know what it's a good way to do anything.

frankgaray: (July 29, 2010 7:16am)

Hey everyone, sorry if you're having trouble viewing today's show. We have passed the info to programming. Thank you.

Bono Vox: (July 29, 2010 6:57am)

I can't see the video: Object doesn't support this property or method, flowplayer-3.1.4.min.js, code 0,line 24 char:11368 (line 116 is also mentioned)

Bono Vox: (July 29, 2010 6:55am)

If this program comes back, I make more money. That said, I'm against it. Buyers (yes, except vets, which is a diff't animal) need to have skin in the game. I like the comment about politicians campaigning on where down payments should be. It's not as cynical as it sounds. In the UK, politicians campaign on which medicines will be made available to the public healthcare system.

Ezradams: (July 29, 2010 6:34am)

Let me get this straight....the seller will just give the buyer a sales concession without raising the sale price? Nothing new there, it's called a seller concession and it's typical in many areas. (Just don't try to increase the sales price to cover the concession. without multiple bids, the appraised value should ALWAYS be less than asking price.) If the seller is willing to net less wasn't that option always on the table? Plus, no skin in the game is still kind of silly, don't you think?

KPL: (July 29, 2010 6:32am)

GaryP - I think it is smoke and mirrors and wishful thinking. Would love to see them come back with tougher guidelines; however, fearful that they won't. Also - It only took 4 mos to reinstate the RD but late is better than.......October 1st!

GaryP: (July 29, 2010 6:27am)

I wonder how much of the talk about reinstating DPA is just wishful thinking by the folks at Nehemiah, and others. The DPA agencies were shut down primarily because of their questionable status as "charitable agencies." Has that changed? DPA still exists, you just have to get the money through a government agency like a state or local housing authority. That, admittedly, is a paperwork nightmare for all involved. In addition, those agencies can limit the LO's ability to make much money on the deal and thus reduces the actual feasibility of those programs.

GaryP: (July 29, 2010 6:16am)

Help me out here folks, I'm confused, as usual. HUD is in the process of reducing seller concessions because they claim that they cause price appreciation. However, DPA doesn't? Hpw does that work? The seller is just going to give the money to the buyer, on top of seller concessions out of the goodness of their heart? I don't think any of you are that naive. We might as well call it what it is, financable down payment and go to 100% on FHA, like VA and USDA. If I had a choice, I would take 6% seller concessions over DPA. Speaking of USDA, did anyone notice that USDA was re-authorized as part of the supplemental bill for Afghanistan on Tuesday? It's supposed to be on Obama's desk, waiting to be signed.

Crosstown: (July 29, 2010 6:01am)

What's with all the duplicate posts lately? So annoying! So annoying!

DanSchweihs: (July 29, 2010 5:57am)

Americans like home ownership and don’t like to rent. Politicians like to get elected. Mortgages are now completely controlled by the government (individuals (Czars) appointed by elected politicians). If politician “A” promises 20% down payments and politician “B” promises no down payments (which improves the economy; increases home prices; and reduces unemployment), politician “B” will get elected. The future is actually quite clear.

DanSchweihs: (July 29, 2010 5:57am)

Americans like home ownership and don’t like to rent. Politicians like to get elected. Mortgages are now completely controlled by the government (individuals (Czars) appointed by elected politicians). If politician “A” promises 20% down payments and politician “B” promises no down payments (which improves the economy; increases home prices; and reduces unemployment), politician “B” will get elected. The future is actually quite clear.

jcollins: (July 29, 2010 5:56am)

Broker in RIC: So are you saying that you do not believe in helping our VETs, the low income and ect. There have been programs avaliable fro a long time that do not require any skin in the game, down payment or CC. They have worked well. Do not confuss what happened in the melt with good long standing guidelines. They should tighten the guidelines but, they should allow the Seller DAPs just as they do for other DAPs. You think it is OK for the GOV. to give DAP but not the Seller???? Appraisers do you take off Commissions from the sales price? What about if the seller was offering 4% to the buyer's agent. That is an incentive.

DanSchweihs: (July 29, 2010 5:56am)

Americans like home ownership and don’t like to rent. Politicians like to get elected. Mortgages are now completely controlled by the government (individuals (Czars) appointed by elected politicians). If politician “A” promises 20% down payments and politician “B” promises no down payments (which improves the economy; increases home prices; and reduces unemployment), politician “B” will get elected. The future is actually quite clear.

HumblePie: (July 29, 2010 5:28am)

I would agree that many appraiser's might use the phrase "typical for the market" and not subtract them from the sale price. Let it be standard practice that any DPA on a comparable should be a minus in the grid. The problem becomes getting reliable and accurate reports of DPA amounts from not only builders in new construction, but reliably reported from our Realtor professionals. In Indiana, the state has a web site to verify most transfer transactions, but, like an appraisal, the information there is only as good or reliable as what is reported to the assessor (but at least that information is a legal record).

KPL: (July 29, 2010 5:27am)

Broker in RIC - Check the default rates on RD and VA loans. You might be surprised to see that the lowest down payments, have the best track records. DPA's work well for most buyers, sellers, and lenders. My experience with them has been excellent with 0 defaults.

Crosstown: (July 29, 2010 5:11am)

Scooby Doo says "Ruh-roh, no ri-reo"! I know too many appraisers that don't know how to handle the DPA when using the sale as a comp. This snowballs the values artificially high when used as a comp in the next sale, the next sale, the next sale, etc.

rob: (July 29, 2010 5:04am)

I agree IF done properly the DPA works. I don't think the DPAs were the WHOLE problem. I like the idea of a little higher score. That gives more incentive for people to get higher scores

HumblePie: (July 29, 2010 4:57am)

I think DPA's can be reinstated with some responsible guidelines and documentation (for all those builder's out there). When all is said and done, more loans are current than in default. And I imagine, if all the research were done, it is about 50/50 sales vs refinances in the default mix.

Polish Printz: (July 29, 2010 4:54am)

Oh boy, a blank screen and can't type either . . .

Polish Printz: (July 29, 2010 4:53am)

OMG a black screen. I thought you only received thise fron Charter

Broker in RIC: (July 29, 2010 3:58am)

No video here either. I just voted "no" in the question below and was a 1:5 underdog. For all of you who voted "yes" please think about the good of the overall market and not the good of your personal bankbook. realized or not, they are connected (as we see now). buyers need to have skin in the game. do some research on the default rate of mortgages which required some money down (and yes, 3.5% is enough to have SOME skin in the game) vs. 0% down mortgages. you will be surprised. greed is what got us all into this mess. we need some common sense -- not the easy road.

findlarry: (July 29, 2010 2:57am)

Opps...no video...I need my video fix please help!