Here’s a link to the slideshow

Here are a few pics:

That was fast. On June 25th House Rep. Travis Childers (D-Miss.) sponsored a bill that would put an 18-month moratorium on HVCC and an end to this free for all we’ve been calling real estate for the past 60 days. The bill has the full backing of the NAR and undoubtedly a number of agents who’ve lost deals recently due to the use of out of area or inexperienced appraisers.

If you’re just tuning in to the HVCC debacle, here’s a refresher on what’s happening: HVCC is the Home Valuation Code of Conduct which basically stipulates that loan officers and others who will make a commission from the home sale cannot choose or make contact with appraisers. A bank’s in-house staff could order the appraisal or the bank could simply use an AMC (Appraisal Management Company). This created a plethora of problems for agents and loan officers because it now means that a loan officer can’t rush order an appraisal for someone who needs to close sooner than later (i.e. before school starts) and caused many sales to fall through due to artificially low appraisals. These appraisals came by way of appraisers using foreclosures or poor comparable home sales to measure the value of a home.

The real drama begins when we discovered that banks can actually own a portion of AMCs which gives them little incentive to use outside appraisers when they can now make money on the loan and the appraisal. Worse yet, AMCs take a large portion of the appraisal fee which gives appraisers very little to support themselves with.

As many working agents can attest, the use of AMCs by nearly everyone has also caused a massive backlog in appraisals and has delayed hundreds, if not thousands (or tens of thousands) of home closings by 3 – 4 weeks or more. I have personally experienced a few home transactions that haven’t closed due to HVCC caused delays including one home that still hasn’t closed. Thankfully the appraisal on that home wrapped up last week (we were originally shooting for a mid-May 2009 closing).

Fast forward to the 25th, the bill has been sponsored and referred over to the House Committee of Financial Services. There has only been one other House Rep. willing to co-sponsor the bill so far; Rep. Gary Miller (D-Calif.). If there’s any hope left that someone is watching over real estate and thinking “Gee, that wasn’t a good idea!” the bill might pick up steam as it moves through the House. I’m especially hopeful that they move on this quickly as a huge influx of previously pent up FHA buyers descend onto the condo market in October 2009 to take advantage of the $8,000 home buying credit in conjunction with newly lightened up FHA guidelines. Only time will tell…

Author Bio: Josh Ferris is an Associate Real Estate Broker in the lower Hudson Valley area, outside of New York City. Learn more about Rockland County real estate including homes for sale in Monroe NY by visiting his community guides for popular communities like The Harbors at Haverstraw.

Image Credit: timetrax

I took some clients out this weekend and we ended up in a neighborhood where every other house was a short sale or foreclosure.  I know from running #s in the past that this is very far out of wack for Austin, so advised them against purchasing there.  There were many more short sales in the neighborhood than foreclosures, and I don’t see them all being absorped, which means they will go back to the bank, and come back on as foreclosures in a few months.  Bottom line is that the neighborhood was on its way down, not flattening or on its way up as most are in Austin.

I hadn’t run #s on short sales before, but found a reasonably reliable technique.  In agent remarks, if a short sale, the agent will add the terms “short sale” 99% of the time.  So, if you run a search for the term “short sale” in agent remarks, you can see the # of short sales in a given area.  There are instances where it will return a false positive, but they are few and far between, so it’s a fairly reliable way to get the data.

There is already an accurate way to find bank owned properties – there’s a field in the MLS where you choose “yes” or “no” and you can search by that field.

I was interested to see the # of foreclosures & short sales in Austin, and in specific areas, so I ran them.  This data is pulled from the residential section of the MLS.  I did not include every area of Austin, so the total # of listings will not add up to the total.  The “% of Total” is the % of short sales & REO’s in that area’s total listings.  The abbreviations next to some of the areas are the MLS areas included for that group.

Here are the results:

We’re back from the wedding and honeymoon (which was awesome…7 days in Playa del Carmen & 4 days in Cozumel with my beautiful wife.)  We had a blast with our friends and family.  While gone, the guys I asked to take care of the last bits & pieces took care of the bits, but forgot the pieces.  Thus, Marilyn was about 99% done, but not ready for a photographer.  I went over today and cleaned the house up the rest of the way, and James Bruce of Realtour.biz will go by tomorrow to shoot it.  I took these pics when I got back on Saturday.  I will post up the professional photographs tomorrow when I receive them.  Here are the before pics w/ a description of the scope of work.

This is a guest post by Hudson Valley real estate broker Joshua Ferris.

Sometimes real estate feels a lot like an episode of Desperate Housewives with all the drama culminating into a series of plot twists that completely change the story as you know it. First we started with HUD trying to protect consumers from unfair incentives tied to a builder’s financial affiliates. We all saw how well that worked out. Then we saw the continued rise of foreclosures in 2009 and now we have the newly implemented bank darling called HVCC taking hold.

What is HVCC?

HVCC stands for Home Valuation Code of Conduct and is the result of New York State Attorney General Andrew Cuomo’s 2007 lawsuit against Washington Mutual’s preferred AMC (Appraisal Management Company) eAppraiseIt LLC. The lawsuit came to be after eAppraiseIt was allegedly forced into providing excessive/unrealistic appraisals of properties to get the WaMu loans closed and, by way of getting the job done, getting signficantly more business from WaMu. Interestingly enough, NYS AG Andrew Cuomo had this to say in a press release:

“The independence of the appraiser is essential to maintaining the integrity of the mortgage industry,” Cuomo said.

Remember that quote because it plays a role in what you’re about to read next.

So in comes HVCC, which prevents mortgage brokers and others who are paid a commission contingent upon the loan closing from contacting/choosing appraisers. This is done to remedy the possibility of appraisers being strong armed into providing inflated appraisals. In return for the inflated appraisals the appraiser would get more business from those loan officers/brokers.

Reality Check!

Sounds good, right? It did in theory anyway. The problem is that HVCC basically kills any opportunities independent appraisers had to grow their business due to the legal liabilities it creates for the lender to use them. Instead, lenders are now using AMCs (Appraisal Management Companies) who assign appraisers on a round robin basis regardless of local market or work experience. Better yet, under the wings of an AMC an appraiser will now only receive up to 60% of the total cost of the appraisal whereas in the past an independent appraiser would receive up to 100% of the appraisal cost. How motivated would you be if your boss just told you that you now have to do the same amount of work but at a 40% pay cut? Appraisals are likely to skyrocket in cost.

What does it all mean?

As a real estate agent or a consumer it means:

• If you need to close on a home right away (i.e. to be moved in before the beginning of the school year) then you may now have to wait an additional 3-4 weeks for an appraisal to be conducted on the home you’re purchasing. You could have everything else totally finished and ready to go (I have on a number of client sales) and still be waiting weeks for an appraisal to happen.
• In the event that you locked in at a really good rate (say 4.75% on a 30-year fixed rate mortgage at the end of April) and the rate lock (60 day lock) expires before an appraisal takes place the buyer is responsible for extending the rate lock or accepting the latest rates available. If an appraisal was delayed by 3-4 weeks and you couldn’t close until the beginning of June your buyer could end up with a rate of, say, 5.70% resulting in a mortgage payment that will now be $117.51/month more on a $200,000 30-year fixed rate loan (doesn’t include taxes etc.) Doesn’t seem like much until you calculate it over 30 years which winds up being $42,303.60 more over the life of the loan.
• There is no guarantee that your appraiser will be familiar with the local market or specific neighborhoods because they are assigned at random. This could result in an unreasonably low appraisal or one marred with bad comparable properties that artificially lower the value of the home. Want a new appraisal? You’ve gotta pay for it!
• If your mortgage broker wants to move your loan to a different lender and you have already paid for an appraisal with the previous lender it is now in the hands of the previous lender to release that appraisal to you. Want it right away? Ehhh… you might be better off ordering another one (at your own expense of course!)

The Benefits

There are going to be benefits though it depends on who you are. On the bright side, appraisers can no longer be coerced into inflating the value of a home which means you could, theoretically, not get stuck in an overvalued house again.

But here’s the biggest benefit of all: Banks can now own up to 20% of an AMC and will profit from the widespread use of AMCs versus independent appraisers. This doesn’t benefit you, the consumer and/or agent, but isn’t that what taking one for the team is all about?

What do you think about HVCC? Have you experienced delayed closings, higher costs and other havoc created by this change to the mortgage process or have you found great value in the changes?

About the Author: Joshua Ferris is an Associate Real Estate Broker in the lower Hudson Valley New York area. Learn more about Rockland County real estate including neighborhoods like The Harbors at Haverstraw by visiting Josh’s website.

Image Credit: Editor B

Further Reading on HVCC:

HVCC: The Cure is Worse Than the Disease (via Appraisal Press)

Notes from WAMP’s Meeting on HVCC (via Rain City Guide)

Here are pics of the new doors from inside and out.  The biggest improvement is moving the living room to a much bigger space.  It can now fit a couch, love seat, and chair.  The old could barely fit a couch & chair.  It’s MUCH more comfortable.

These pics are a couple of days old, and we’re pretty far ahead of this.  Nevertheless, here are a couple of pics of the new floors:

The floors are 100% complete, as are the double doors where the boarded up windows are.  The electrician is 90% done moving fixtures/plugs.  Tomorrow, the new silestone countertops come in, and the new vanities for the bathrooms are installed, as well as powerwashing the exterior + roof, and starting the mud/tape/float of the interior.

I’ll get some more pics up tomorrow.  It’s all coming together!

The 54 acre site for the Lakeway Regional Medical Center is finally moving forward with site preparation.  Toward the end of last year I saw the clearing of many trees on the site, but then the activity stopped.  A couple of weeks ago, work picked up again.  As I drove past the site one morning last week while taking my daughter to school, I saw over a dozen construction vehicles and other equipment crushing rock and moving dirt.  What appears to be happening is the leveling of much of the site, which was originally very hilly.  It looks like the 54 acres may be multi-tiered and the initial rendering I have seen shows a pond to be at the lower level of the property.

The hospital will open with 104 beds and a level II trauma center with a helipad.  Services will include cardiology/cardiothoracic  services, radiation oncology, surgery, women’s health services, physical therapy/sports medicine, speech-language pathology, obstetrics and gynecology  and more.  The hospital is expected to add rooms over time, expanding to around a 200 bed facility.  Also on the site will be a hotel, day care, medical offices, retail space and restaurants.

This medical center will really put Lakeway on the map.  The hospital and facilities around it will be like St. David’s or Seton, but will serve an area that currently is anywhere from 30 minutes to an hour to an emergency room.  The medical center in Lakeway will serve people from Steiner Ranch and Hudson Bend at one end to Spicewood and Dripping Springs at the other end.

The 54 acre site sits right next to the Lake Travis ISD offices and Lake Travis Middle School on the west side of RM 620.

Author Bio:

Sam Chapman is a Lake Travis real estate agent who has lived and worked in the Lakeway area since 1987.  Sam is very involved in the Lakeway and Lake Travis community.

The new windows are in at Marilyn.  It adds a ton of light to the room.  We also demo’ed out the old flooring and the guys are stripping some old gunk off the floors before they start putting down the new wood.  Here are pics of the new windows and bare floors:

Carlos finished putting in the closet in front of the washer/dryer, but I don’t have pics of it done yet.  Here it is roughed in:

The closet in the bigger bathroom is demo’ed out.  There was some nasty drywall behind it.  Here are pics:

We demo’ed these windows out and have plywood over them until the doors get in on Wednesday.  Here are the windows “before”:

So after 6 magical years, Ali & I are getting married in two weeks!  Because of this, we’re selling her house at 5906 Marilyn Dr.  We decided now was as good a time as any to get it on the market and sell this puppy off.

Luckily, her neighborhood (Allandale) is still doing well.  Even better, her price point (low $300s) is still doing well, as well.  So, we’re in the position to remodel the house, sell it, and make a little coin.

When Ali bought the house, she did a few things.

• Leveled slab with 19 piers
• Put in laminate wood floors (now ruined)
• Demo’ed wall separating living/dining rooms
• Repainted
• Put in new subway tiles in both baths
• Put in new cabinetry in kitchen
• Put in tile countertop in kitchen

The slabwork was big time, and the subway tiles in the baths still look really good, as does the cabinetry in the kitchen.  Unfortunately, we’re going to have to “do over” some of the work – namely the floors & the countertops.  Here’s the list of stuff that we’re doing in 1.5 weeks time (we started on Wednesday.)

• Tear down chimney/fireplace (falling down due to foundation work – long story)
• Put in 2 picture windows in place of chimney/fireplace
• Move the front door so that the old living room is now the entryway, the old dining room is now the living room, and the sitting area in front of the old fireplace is now the dining room.
• Put in bamboo flooring throughout house.
• Correct the a/c return air (really funky set up which will now be corrected.)
• Build a closet door in front of washer/dryer.
• Put in white silestone in kitchen.
• Demo cabinet in big bathroom and put in new vanity w/ sink.
• Put in new sink in small bath.
• New carpet in 3 bedrooms.
• Paint exterior & interior & repair shoddy drywall work.
• Sod front lawn.
• Change out fixtures, add 4 cans in new living room, move a couple of fixtures.
• Change out doornkobs.

Phew!  That’s lots of work in under 2 weeks!  Here are some before pics, and I’ll blog the progress.