Sarahiously Speaking

Meet Odette!

Odette is a very sweet beagle mix who is in desperate need of a loving home.  She is looking for a second chance at life that will include lots of hugs and baths!  Odette is about 4 years old and seems to get along with other dogs.  She is very good with adults and kids over 8 years old.  She loves to play, there can never be enough toys, and is quite affectionate.  Odette is up-to-date on her shots and is spayed.  If you have the loving home that this sweet girl needs, please contact the Fredericksburg SPCA today and give Odette the life that she deserves.

Meet Shizam!

Who doesn’t need a furry friend named Shizam!  That’s the awesome name ever!  Shizam is a 2 year old black domestic short-haired feline.  He has a large personality to match his name.  He’s a man who knows what he wants and knows when he wants it.  He’s a cat that loves on his own terms.  He is good with adults and children 10 years old and older.  He is good with cats if they are introduced properly.  Shizam is up-to-date on his shots and is neutered.  If you need a spunky feline who is larger than life, Shazam is the guy for you.  Call today to meet Shizam!

Feel free to contact the Fredericksburg SPCA at (540) 898-1500 and schedule an appointment to meet Odette andShizam.  Don’t miss the opportunity to have either of these worthy featured pets as members of your family!

The Home Valuation Code of Conduct continues to be a hot topic in real estate across the country.  In case you haven’t heard, the Home Valuation Code of Conduct (HVCC) was enacted May 1, 2009 for all conventional, single-family 1-4 unit loans that will be sold to Fannie Mae or Freddie Mac.   HVCC is meant to curb undue pressure on appraisers from lenders and real estate practitioners to over value properties and to help ensure independent, objective evaluations from uninterested appraisers.  The new HVCC rules prohibit mortgage brokers and real estate brokers from directly ordering appraisals and it requires lenders to have some sort of separation between loan production staff and appraisers.  Large appraisal management companies (AMCs) have thrived under the new HVCC rules, but is this an example of survival of the fittest or creating another incestrial relationship between large banks and the appraisal process?  Has HVCC created better appraisals from the most capable appraisers?  It looks like the answer is no. 

One problem with HVCC is that it does encourage the use of AMCs, appraisal management companies.  What could be wrong with an AMC?  Well, for starters the appraisers that are members of AMCs must pay a referral fee to the AMC for the appraisal assignment.  Buyers are usually charged $250-$450 for a standard appraisal.  AMC appraisers are typically only paid 40% of this appraisal fee.  The rest of the money goes to the AMC.  Everyone knows the old adage; you get what you paid for.  If an employee only makes 40% of what they would normally get paid for the same amount of work, do you think they would work at the same level as before?  Probably not.  And, that may not be a deliberate consequence of the lower pay.  If an appraiser is only making 40% of what they used to make per appraisal, the appraiser would have to take on more work to keep their income level the same.  The more work you take on, the less likely the work will be performed at the same level.  It’s a vicious cycle.

So, now we have appraisers who are strained financially and are having to take on more appraisals than time allows.  The increased need for more assigned appraisals adds another factor to the equation.  The hungrier you are, the farther you are willing to go to hunt for food as resources dry up in your immediate area.  Appraisers are going outside their area of practice to compensate for the decrease in income.  Much like real estate licensees, appraisers are only supposed to appraise property in areas that they clear understanding of the geographic area and market that the subject property is located in.  Many real estate agents have logged complaints with the National Association of REALTORS® that they are seeing appraisers crossing into neighboring states to evaluate homes.  This can cause huge problems in a transaction.  Can a Baltimore, Maryland appraiser truly have a clear understanding of the market in Fredericksburg City, Virginia?  I find it highly unlikely.  There is nothing in HVCC that says the appraiser must be licensed in the state the subject property is located in.  This is crazy talk!  As a REALTOR® licensed in Virginia I am not allowed to sell property in Tennessee just because I am in need of additional income.  No, I need to get my Tennessee real estate license. 

Another huge problem with HVCC is who owns the AMCs.  Not all the surprising, the big banks own, or have ownership interest in, most of the big AMCs.  If Wells Fargo, Citibank, and JP Morgan Chase are sending their appraisal requests to the AMCs they have an ownership interest in, they most likely have more control over the appraisal process and this act does not allow for an atmosphere of independence that HVCC is supposed to create.  In fact, this practice could continue to harbor the back handedness of the market we are trying desperately to recover from.  The HVCC document contradicts itself when it comes to this issue.  On one page it states that the lender should not use an appraiser that has any affiliation whatsoever with the lending institution or a company the lending institution has an affiliation with.  On the next page HVCC lists conditions that would allow the use of an appraiser that would have been eliminated by the aforementioned rule.  The only thing clear about this portion of the document is that the creators of HVCC are talking out of both sides of their mouths.  I believe most consumers would have a problem working with a REALTOR® who only allows their clients to use a lender, home inspector, and settlement agent that is related to the REALTOR®.  Consumers and lawmakers have come to expect unbiased referrals and relationships from the real estate industry.  Why is the appraisal industry being held to a different standard? 

In the vein in which HVCC was created, it is a good idea.  However, in practice it is horribly flawed in its current form.  Just when the real estate industry was beginning to turn the corner toward recovery, appraisal rules are introduced that stunt the growth of the market.  Yes, we have created a time when action needs to be taken against the activities that allowed the housing industry to collapse and take the economy with it, however, we do not need a hastily drafted and poorly executed document to be steering this fragile ship back into rough waters.

There are currently 90 cats and 26 dogs in the Fredericksburg SPCA.  If you know anyone looking to add a new member to their family, be sure to remind them that there are cute kitties and doggies in local shelters.  Let’s see who is available for adoption this week!

Meet Benny

Benny is a shy boy who needs a new family that will be patient and have time to teach him the joys of being a member of a good family.  He is 1-2 years old and is a short-haired tabby.  He would prefer to be the center of attention in a quiet, adult-only home.  Benny is up-to-date on his shots and is neutered.  If you have room in your heart and your home for a little guy that desperately needs to be shown unconditional love, Benny may be the cat for you!

Meet Duke

Duke is an energetic, 3 year-old black labrador retriever.  Duke needs an active family who enjoys outdoor time, long walks, and plenty of playtime.  He has lots of personality and gets very excited.  Like many labrador retrievers, Duke thinks he’s the perfect lap dog.  Duke is up-to-date on his shots and is neutered.  He is will be perfect for a family with adults and is good with some other dogs.  If you have time to are in need of a high-energy best friend, Duke may just fit the bill. 

Feel free to contact the Fredericksburg SPCA at (540) 898-1500 and schedule an appointment to meet Benny and Duke.  Don’t miss the opportunity to have either of these cute boys as members of your family!

In May a few of my readers talked about a new Mexican restaurant near Southpoint in my Cinco De Mayo post.  I am a tried and true El Charro fan.  My husband and I have been going there since we moved to Fredericksburg in 2003.  However, we are always up for a new restaurant experience and decided to visit Mexico Restaurant because so many of you told us to.  I’m going to go ahead and let you know, we’ll be sticking with El Charro.  Now, I’m not saying that Mexico was bad.  Actually the food was very comparable to El Charro.  The ambiance may be a little better at Mexico.  But there are three things that El Charro has that Mexico does not. 

First, you can’t order by number at Mexico.  I know!  This is ludicrous!  My husband and I stared at the menu for a good 15 minutes searching for a #5 and a #21.  No matter what Mexican restaurants we have eaten at before, we’ve always been able to order our favorites, #5 and #21.  Mexico does have a pretty extensive menu, but it becomes rather confusing.  We need an easy menu to read, and a #5 and #21.  Second, the prices at Mexico are higher than at El Charro.  Maybe this is because you can’t order by number.  A #5 at El Charro, 2 enchiladas, beans, and rice, costs $6.95.  A comparable meal at Mexico cost $9.95.  Yes, it’s only $3, but $3 per entrée can add up.  Also, unlimited chips and salsa are free at El Charro.  After your first basket at Mexico, it is a $1 per refill.  Again, it doesn’t seem like a lot of extra money, but ordering one extra basket along with the increase cost in the entrées, we are now spending $7 more.  Third, El Charro has better service than Mexico.  (At least the night we went).  Our server went missing for long periods of time.  We never got drink refills.  And, we had to ask the manager for our check.  We’ve never had this problem at El Charro.  Although the food came out faster at Mexico, I can’t say that was very comforting.  I hate to think of pre-prepared Mexican food sitting under heat lamps waiting hours to be ordered. 

My husband and I will definitely appreciate El Charro more the next time we go.  I’m not saying Mexico was bad.  Mexico just didn’t meet my expectations or live up to the hype.  El Charro wins the battle of the Mexican restaurants.

Fredericksburg City:

• 114 days on market – this is 6 days more than in August 2008
• Sellers received, on average, 92.0% of their list price when the home sold
• There is 12.77 months of inventory on the market
• 13 homes sold in July 2009 – this is 1 less than in August 2008
• The most popular price range was $300,000-$349,999.   
• The median sold price was $230,000, compared to $306,200 in August 2008
• Financing Terms:  Conventional – 3, FHA – 2, VA – 4, Assumption – 1, Cash – 3

Orange County

• 132 days on market – this is 26 days less than in August 2008
• Sellers received, on average, 87.81% of their list price when the home sold
• There is 10.05 months of inventory on the market
• 42 homes sold in August 2009 – this is 11 more than in August 2008
• The most popular price ranges were $200,000-$249,999
• The median sold price was $171,,250, compared to $215,000 in August 2008 
• Financing Terms:  Conventional – 9, FHA – 14, VA – 4, Assumption – 2, Cash – 12, Other – 1

Spotsylvania County

• 75 days on market – this is 42 less than August 2008 
• Sellers received, on average, 94.64% of their list price when the home sold
• There is 6.43 months inventory on the market
• 146 homes sold in August 2009 – this is 9 less than in August 2008 
• The most popular price range was $250,000-$299,999
• The median sold price was $190,500, compared to $241,900 in August 2008 
• Financing Terms:  Conventional – 32, FHA – 64, VA – 25, Assumption – 5, Cash – 20

Stafford County

• 79 days on market – this is 28 less than August 2008 
• Sellers received, on average, 93.93% of their list price when the home sold
• There is 4.76 months inventory on the market
• 165 homes sold in August 2009 - this is 22 more than in August 2008 
• The most popular price range was $300,000-$399,999
• The median sold price was $220,000, compared to $264,894 in August 2008 
• Financing Terms:  Conventional – 28, FHA – 58, VA – 50, Assumption – 6, Other – 2, Cash – 21

Prince William County

• 60 days on market – this is 51 less than August 2008 
• Sellers received, on average, 96.14% of their list price when the home sold
• There is 3.92 months inventory on the market
• 758 homes sold in August 2009 - this is 242 less than in August 2008
• The most popular price range was $300,000-$399,999
• The median sold price was $215,000, compared to $205,600 in August 2008
• Financing Terms:  Conventional – 185, FHA – 291, VA – 114, Assumption – 21, Cash – 140, Other – 7

Statistics provided and calculated using data supplied by MRIS.

Well, banks are at it again.  Let me clarify, banks with a well documented history of predatory lending are at it again.  They have come up with new ways to hold the unsuspecting consumer down.  Let me rephrase that, these banks have come up with new ways to manipulate the system and get defaulting borrowers in even more trouble.

The most brilliant part of all of this is that the government has made it possible.  Every so often the Feds come up with new requirements for banks so they can continue to receive TARP funds.  One such requirement is for banks that have heavy numbers of foreclosures and short sales on their books to modify defaulting loans.  In essence, these banks are taking loans, usually these loans can be classified as predatory, and adjusting the terms to save the homeowner from foreclosure.  Each bank addresses loan modifications differently.  With some banks, the consumer needs to contact the bank and ask if they qualify for a loan modification.  This seems like the logical way to approach loan modifications.  But let’s remember, banking institutions are not known for being logical.  My favorite bank approach to loan modifications is for the bank to send a blanket letter to all defaulting borrower’s stating that they have investigated the loan and the likelihood that the loan can be modified and the loan can not be modified.  (Hmmmm… interesting approach.  I would love to see the information banks used to come to this conclusion since they have not asked the borrower for any personal information or for changes in information since the loan was obtained).  I guess banks figured that as long as they “tried” to modify each and every loan that was in default, then they can still get access to stimulus money. 

But, not so fast, in walks the government, again.  Rules have changed and they have told the banks to loosen the requirements for loan modifications.  Loosing the requirements could be good for some banks and some (few) borrowers.  Once the loan is modified the bank stands a better chance of being able to sell it to another bank.  Now, this loan is someone else’s problem.  Brilliant!  However, there could be a snag to the loan modification tango.  Many defaulting consumers who have been told that they do not qualify for loan modification have put their homes on the market as a short sale.  Once the seller finds a buyer and they ratify a contract, the seller can not modify any liens on the property.  (If you’ve ever been to a closing/ settlement table you should remember the settlement agent ask the seller if they have made any decisions about any an existing lien or caused a new lien to be placed on the property since the contract was ratified).  Many banks are ignoring this and contacting defaulting borrowers after the short sale process is started and offering to modify loans.  This infuriates most real estate agents.  Why?  Well, the banks are in possession of a ratified contract from a seller and a buyer.  The bank is aware that the property is being sold as a short sale and their approval is needed to make the sale go through.  The bank should know that the seller is not allowed to modify any existing loans on the property if it is under contract.  Now, there is a seller who has been given hope that they can save their house, a buyer who has their heart set on purchasing the house, a bank that has interfered with the sale for its own advantage, and two real estate brokerages that have worked very hard on a transaction that may not get paid now. 

 A seller in this situation should contact an attorney immediately.  I’m serious.   Stop reading and contact a real estate attorney immediately!  You are treading on dangerous waters.  If a seller accepts the loan modification, they could find themselves in default.  Default could cost them more than a short sale or foreclosure.  As a buyer, you should contact a real estate attorney immediately.  Buyers in this situation need to learn what remedies are available to them as a result of a seller taking a loan modification and refusing to sell the home.  As a bank trying to modify the seller’s loan, be careful.  Now that two parties to the transaction have contacted an attorney, every one knows the bank has torturously interfered with a ratified contract.  That’s not good.  The bank’s loan modification representatives should expect a few phone calls from unhappy attorneys.  As a real estate agent who finds their transaction going down the drain, there is recourse.  The real estate brokerages should contact their attorneys and find out what recourses are available to them.  The seller could find that they still owe real estate commissions even though they are now refusing to sell the property. 

I don’t know how many times I’ve said it before, but apparently it must be said again; if it sounds too good to be true, it usually is.  I have never known a bank institution to do something altruistically.  They don’t care about keeping a borrower in their home.  Lending institutions care about protecting their investments.  They care about staying in business.  They care about Federal investigations into their lending practices.  Any decision a bank makes is a decision in the bank’s best interest, not the consumer’s.