Rates are up Slightly, House Valuations, and More News

Good afternoon. I hope you all had a fabulous weekend. I know I did. My son was here visiting from England, but alas, all good things must come to an end. He is returning to his home across the pond today. So, I'm back, and ready to go to work for all of you again.

The stock markets opened higher today, based on positive comments about bank stocks. The banks are actually doing pretty well financially, all things considered, because of increased fees and hugely increased margins on real estate transactions. The DOW is currently up 175 points, the NASDAQ up 35 points.

The 10 year T bond traded as low as 3.25% yield overnight, but is now up around 3.34%. This has caused most mortgage rates to rise a bit from the close on Friday. I am still seeing best rates on 30 year fixed rate loans below 5% for those of you in owner occupied homes with at least 20% equity. Here's my seque into HVCC (Home Valuation Code of Conduct appraisals) again!

I just received an appraisal today - what a disaster! This appraisal was on a home in the Wilshire Beaumont area, an area that has largely held its values. This appraisal almost completely discounted a beautifully finished basement (670 square feet), and overly emphasized comparable sales of homes 500 square feet smaller, with unfinished basements. Other comps that were slightly larger homes (approximately 100 square feet), with unfinished basements, that sold at higher prices were given little weight in in the valuation.

For those of you who think HVCC doesn't affect you, because you're not buying or selling right now, please think again. If home sales are failing, or prices are falling based on these very low appraised values, this definitely affects the value of your home when and if you decide to sell, or if you want or need to refinance your current mortgage. It has been estimated that HVCC, since inception on May 1, 2009, has been responsible for over $1 trillion dollars loss in home values nationwide. I don't have any statistics on how many home sales have fallen through because of this law, but will continue to research this topic and will report when I have more data.

More news headlines:

1. Oil prices closed below $60/barrel again today.

2. The ECB has instructed European banks to start lending and stop hoarding cash. Many European banks simply paid back the federal funding they had received to encourage lending, rather than lend, due to "playing it safe mentality."

3. Commercial construction lending is down 16+% here in the U.S. because of the same "play it safe mentality" in our banks.

4. We have a 2 week hiatus on sales of T-bonds beginning this week. While this may help bond prices and yields stabilize, the opposite could also occur because we are now well into earnings reports from all businesses publicly traded.

5. It is estimated that unemployment nationwide will hit 13% or higher before this recession comes to an end. Unemployment numbers for Oregon are due out later this week, and are estimated to be over 12% already!

FYI - we just received Wells Fargo's most current rating on property valuation risk ratings. All 3 counties in the Tri County area of Oregon (Multnomah, Clackamas, and Washington County are all considered high risk counties.) Clark County, in Washington, is also in the highest risk category.

For those of you contemplating a purchase, whether for investment or for your own home, check out the Investor Loft. This site will give you information on homes that are priced below value, with an estimate of the equity you will be buying at the current sales price.

Another great site which will give you insight on neighborhoods is Cyberhomes. For a nominal fee of $9.95 per month, this site will give you data on recent home sales, and will show you trends for the neighborhoods, so you will know if you are buying into an increasing or decreasing valuation neighborhood.

Both of the above sites cover all the major cities in the country.

Have a fabulous day today.

Please remember to either email or call with questions, comments, concerns.

Best regards,

Shelby Bateson

Town & Country Mortgage

Portland, OR 97219

503-819-6545 phone

http://www.shelbytncmortgage.com

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

HVCC is raising havoc with a fragile housing industry

HVCC = The Home Valuation Code of Conduct
The focus of today's news centers around HVCC. I think it's important that you know about HVCC and how it can and WILL affect you and anyone you know buying, selling or refinancing a house. HVCC went into effect on May 1st this year, and is raising havoc with the already fragile housing industry.

HVCC has removed our ability to communicate with appraisers about your loan transaction. We are forced to use a "lender assigned" AMC (Appraisal Management Company) to order your appraisal. These management companies are located all over the country. They charge appraisers a huge percentage of the cost of the appraisal, which has driven up the cost of the appraisal to you, the consumer.

AMCs are not licensed, and are therefore not regulated, and the lenders can even own up to a 20% interest in the AMC we are required to use.

The best appraisers are often unwilling to work with AMCs, so we are often left with inexperienced appraisers doing what our local appraisers used to do best - evaluate a home's value based on their experience and knowledge of real estate in your local area. Can you believe your appraisal for a home in San Francisco, for instance, might be valued by an appraiser in Kansas? Does this make sense?

The increased cost of the appraisal is not the only way you can lose money. Since we are now relying on unknown people to do the appraisal, we have no control over the time frame to get a completed appraisal back to the lender. This can cost you in time to close the loan, which can result in either losing your rate lock, or having to pay for lock extensions. (Typical lender charges for lock extensions = 1/4% of the loan amount for a 15 day lock extension). Are we now talking potentially thousands of dollars?

And, what if the seller needs the loan to close faster? Can this result in a lost sale?

If you are unhappy with the valuation these appraisers arrive at, for your home, or the home you want to purchase, there are additional charges for an appraisal review. And, of course, you guessed it - the person doing the appraisal review is unlikely to know anything about your neighborhood or even home value trends in your state!

AND - if rates drop during your transaction, loan officers cannot transfer your appraisal to another lender to take advantage of better rates for you. You are forced to pay for another appraisal to move your loan!

If you are as outraged as those of us in the real estate, mortgage, and appraisal industries are, please write your Congressional representatives and let them know what you think. Help us kill this travesty called reform. We are doing all we can to fight this bill, but we need your help too.

Best regards,

Shelby Bateson

http://www.shelbytncmortgage.com/