PAA Collaborative Sharing of Real Estate Appraisal Information

The numerous fires that have been burning in the Santa Barbara/Montecito and Southern California areas have displaced hundreds of people, burned countless thousands of acres, and have caused property damage in excess of $1 Billion. This is a far reaching disaster that has unfortunately impacted many people. For most homeowners, this is a devastating loss, and the thought of an Insurance Appraisal is the very last thing on their minds.

An Insurance Appraisal can be either retrospective (retroactive appraisal), or prospective, and is a replacement cost analysis which provides an accurate estimate of the amount of insurance required to replace each structure and/or amenity exactly as it was on the effective date of the report. The structure replacement cost and land values are clearly identified and divided, and this estimate helps provide an insurer with the most accurate structure replacement cost coverage or used to support a damage claim assessment.

When the decision is made to rebuild, a new construction loan and new construction appraisal will include a detailed examination of all the proposed construction plans, and a projection of both costs and an estimate of value at completion of the new home construction project.

Professional Appraisal Associates has been specializing in the Santa Barbara and Montecito areas for several years now, and has performed numerous appraisals on large-scale ranchette and multi-acre estate properties with values in excess of $25 Million.

Most recently, PAA has been performing special retrospective insurance appraisals and new construction loan appraisals for the unfortunate fire and flood damaged homes throughout Santa Barbara County. In addition, we have performed numerous California Wildfire property inspections and verifications, to ensure there was no damage to properties now in the underwriting/escrow process.

PAA is now using state of the art computer imaging and GIS applications including Satellite/Aerial viewing, the latest enhanced street mapping tools, and new GPS locating systems to assist in the most recent retrospective appraisals we have been performing for insurance companies for Santa Barbara/Montecito fire damaged properties. We are also using new state of the art engineering and construction cost data software programs to help project costs for the new construction loans.

We are your Santa Barbara County specialists for insurance fire damage, flood damage, and new construction loan appraisals for the California Wildfire damaged properties. For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.

HOPE for Homeowners (H4H) Program

The HOPE for Homeowners H4H Program was created by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. H4H is an additional mortgage option designed to keep borrowers in their homes.

The program is effective from October 1, 2008 to September 30, 2011.

As many as 400,000 homeowners could avoid foreclosure through this program over the next three years. If you are having trouble making your mortgage payments, HOPE for Homeowners may be able to help you, by refinancing your loan into a new 30-year fixed rate loan with lower payments.

How the Program Works

There are four ways that a distressed homeowner could pursue participation in the HOPE for Homeowners program

1. Homeowners may contact their existing lender and/or a new lender to discuss how to qualify and their eligibility for this program.
2. Servicers working with troubled homeowners may determine that the best solution for avoiding foreclosure is to refinance the homeowner into a HOPE for Homeowners loan.
3. Originating lenders who are looking for ways to refinance potential customers out from under their high-cost loans and/or who are willing to work with servicers to assist distressed homeowners.
4. Counselors who are working with troubled homeowners and their lenders to reach a mutually agreeable solution for avoiding foreclosure.

If you are having trouble making your mortgage payments, both the new TARP and HOPE Programs for Homeowners may be able to help you by refinancing your loan into a new 30-year fixed rate loan with lower payments.

We have been performing both 1004 Full FHA Appraisals, and also Exterior Only FHA 2055 Drive-By Appraisals for the new HOPE for Homeowners (H4H) program that was recently enacted by Congress to help those at risk of default and foreclosure refinance into more affordable, sustainable loans. The H4H is an additional FHA mortgage option designed to keep borrowers in their homes.

We have been performing the FHA HOPE for Homeowners Appraisals since the program inception on October 1, 2008, so we are very familiar with all the special new requirements associated with this unique FHA program.

In addition, we are prepared for the latest Troubled Asset Relief Program (TARP) start, and the required TARP baseline appraisals needed for refinancing.

PAA - Professional Appraisal Associates has been performing high quality, comprehensive, and accurate FHA Real Estate Appraisals for several years. We understand all these new and special FHA loans, and can help streamline the appraisal process. For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.

PAA - Professional Appraisal Associates has been performing high quality, comprehensive, and accurate Real Estate Appraisals for many of the above mentioned loan products for over 25 years. We understand all these loans products, and can help streamline the appraisal process. For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.

Time to take a new look at FHA Loans

Federal Housing Authority (FHA) loans may actually become popular once again! Based upon the latest economic stimulus package signed into law, refinancing or buying a home with an FHA Loan may now make sense in California. This is particularly the case in Santa Barbara County, where the FHA loan value limit formula has raised significantly due to our higher Median Price levels.

The Federal Housing Authority, Fannie Mae, and Freddie Mac now have the limits on the size of mortgages they can finance or buy increased up to $729,750. Even higher limits are now available for Multi-Family Units.

With this new reform package, the Federal Housing Administration is now more relevant in today’s housing and mortgage lending industry since they are expanding the agency, loosening underwriting standards, and most importantly have raised the original restrictive loan limits here in California and especially Santa Barbara County.

FHA insured loans may also be an option for borrowers who may be unable to make payments on their current Adjustable Rate Mortgages when their ARM interest rates reset.

Even if your credit is less than perfect, an FHA loan might still make sense since you may qualify despite any previous financial problems. With the new guidelines, FICO scores do not apply, and there are relaxed rules for people who have had a bankruptcy discharge or Foreclosure after 2-years. The FHA rules are loosened, all at a time when the conventional /Jumbo Loan requirements have become far more stringent in the last several months.

The FHA Rates & Terms are far more competitive than the current Jumbo Loans, with rates typically a full 1 - 1.5 percent lower. The typical FHA Loan has little or no adjustment to the interest rate, and the Mortgage insurance is funded right into the loan which is far less than Private Mortgage Insurance (PMI) premiums. Borrowers can also finance up to 97% of the purchase price, and if combined with other types of loans, your down payment may actually be zero. The allowable debt-ratios are also higher than the strict debt-ratio limits required for today’s conventional loans.

A recent HUD announcement states that the increase in loan limits will enable more working families to become homeowners and will help the FHA mortgage insurance program keep pace with the robust housing market. The FHA estimates that it may be able to help over 200,000 borrowers who are facing possible foreclosure with the new higher loan limits coupled with the loosened underwriting standards.

It might be time to reconsider the more affordable FHA-backed mortgages, but don’t delay since this is only a temporary increase in the loan limits, and it is scheduled by law to end in 2009.

We have fully approved HUD / FHA Roster Appraisers that were tested under the original stringent FHA guidelines/standards. We understand all the FHA requirements, and can help streamline the FHA appraisal and loan underwriting approval process.

For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.


 

California Proposition 8 Property Tax Reduction and Tax Assessment Review Process.

Did you know that most property in California is over-assessed, and that most property owners pay too much in property taxes. If you own your home, it's likely you're paying too much in property taxes. The National Taxpayers Union estimates that 60 % of taxable property in the United States is over-assessed! Despite the declining values we are experiencing today, most people don't appeal their property taxes because they simply don't know how.

Proposition 8 Overview

State law (Proposition 8, Temporary Reduction of Assessed Value For Property Tax Purposes, passed in 1979) allows property values to be reduced if there is a decline in market values below the current assessed value.

Who is affected?

Property values have declined significantly over the last 3-Years. If you purchased your home between the years 2004 - 2006, your assessed value is probably much higher then the present market value.

How much can I save?

Properties in Santa Barbara County may have declined as much as $150,000 - $200,000, which represents a substantial negative decline. Based on the current Proposition 13 Tax Rates, if your home has not been reassessed in the last several years you could typically save from hundreds to even thousands of dollars each year. Your actual savings will depend upon the current assessed value, tax rate, and the prevailing market value, which can be best determined from a complete Real Estate Appraisal.

Will the Santa Barbara Assessor's Office lower my taxes?

As a result of Proposition 8 and Section 51 of the California Revenue and Taxation Code, all County Assessor’s in California are required to review and consider requests for value reassessment with proper evidence, and then they are required to reduce taxes correspondingly. A properly documented and supported assessment review form will ensure timely processing and acceptance.

How long will my taxes stay reduced?

Any Proposition 8 tax reduction is considered temporary, although some tax appeal reductions in our county have lasted for over 10+ years. As a minimum, your reduced tax rate will last one year. Realistically, based upon current market conditions and forecasts, the reductions will probably last for several years. Your assessment value and taxes will eventually increase back to the original Proposition 13 rules when the Assessor’s Office decides to reassess your area after the market values have increased. Your taxes will simply revert back to the original Proposition 13 amount upon reassessment.

Although no one has a crystal ball, based upon the current market and forecasts it may be several years before values actually return to the pre-2004 values.

Why should I bother?

Property values are declining, but the Proposition 8 laws can help you save significantly on your next property tax bill. Our clients can typically save from hundreds to thousands on their next Santa Barbara County property tax bill. You can pay only $350.00 today, and then save thousands for years to come.

Don’t delay, take advantage of this declining market before the deadline or values start climbing back up again by calling us for all the details. We can explain the Proposition 8 Tax Assessment Review process and our special program details. You have everything to gain, and nothing to lose by switching to a new lower Prop 8 assessed value.

Good, Fast, and Cheap Appraisal Services

Appraisal Quality doesn't cost, it saves.

There's an old adage that states "you get what you pay for", and nothing could be more poignant and true than when it comes to a home Real Estate Appraisal. A poorly prepared, poor quality, and minimal effort appraisal costs everyone in the long run, including the originating Loan Officer/Mortgage Broker, the Appraisal Reviewers, the Bank Underwriters, and finally the borrower/client in the end.

There is a disturbing new trend in the industry towards faster, cheaper, and significantly limited and inaccurate appraisal reports in an effort to save a buck. This frequently back-fires when the loan deal falls through because the appraisal is rejected.

A poorly prepared appraisal and report will be quickly rejected by the initial reviewers or underwriters, which drives cost and delays the overall loan process. In some instances, Bank Underwriters are forced to require a special review appraisal be performed, or may even insist on a complete re-appraisal of the property again. Depending upon the review results, they may very well reject the entire loan package based on missing or inaccurate information. If the property was overvalued, many times the borrower/client is the one that ultimately loses in the end since the qualifying value could not be met, so they have paid for a worthless appraisal.

As part of our ongoing appraisal business, we also perform numerous appraisal reviews each year, and find that many of the recent appraisal reports are overvalued due to inaccuracy, or in some instances, out and out fraud, and all of these properties must be reappraised at a considerable cost. These reviews then go back to the underwriters, who must then face the loan cancellation dilemma.

PAA - Professional Appraisal Associates has been performing high quality, comprehensive, and accurate Real Estate Appraisals for over 25 years. Instead of wasting time and money, give us a call and let us help you save money up front by performing a quality Real Estate Appraisal at a best value price. For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.

The Problem with AVM's

AVMs (Automated Valuation Models) are now gaining widespread use in determining Real Estate property values, through the use of non-standardized computer programs.

In a perfect static world, computers could easily estimate property values if the prices simply remained the same, or just changed at minimal or specific predictable rates. In reality, the Real Estate market is extremely dynamic and ever changing. This is particularly the case in Santa Barbara County, where typical home prices vary significantly from the nationwide median norm.

The other problem with computers predicting Real Estate values is the old adage "garbage in, garbage out." Computers need reliable data to make accurate predictions, but this data is simply not available in many areas, especially here on the Central Coast. The accuracy and recency of data is also an important factor, and AVMs inherently lag in their pricing data and results.

Computers aren’t appraisers, so they can’t see your new addition, special flooring, tile countertops, landscaping, etc, and they don’t consider these very important amenities when calculating the value of your home. Whether your house is the great Taj Mahal Palace in India, or a burned down ruble, the computer algorithms only appraise your house as a median data average.

AVM’s are historically inaccurate. It is no surprise that the City of New Orleans and the Federal Government (FEMA) recently issued a directive to stop using AVMs, since they were notorious for being grossly inaccurate. In fact, the typical errors rates were as high as 50%, and both in undervaluing and overvaluing properties.

AVM’s are clearly flawed, but despite this fact they are becoming the new rage in the lending industry to get appraisals faster and cheaper. The problem is when the estimates are grossly undervalued (which is often the case), then these inaccurate computer valuations cause the loan deal to fall through. Many times the borrower/client is the one that ultimately loses in the end since the qualifying value could not be met with the AVM, so they have basically paid for a worthless computer report. Just as serious, an overvalued AVM property appraisal gives the owner false information that could later cost them thousand of dollars.

Choose a real person for your next Real Estate Appraisal, not a flawed computer program. PAA - Professional Appraisal Associates has been performing Real Estate Appraisals on the Central Coast since 1991. To us, you and your home are not just statistical data points. We physically inspect and evaluate your property, and consider all the many amenities and upgrades you have worked hard to purchase and/or install. Instead of wasting time and money paying for an AVM that is either significantly under or overvalued, give us a call and let a local expert perform a quality Real Estate Appraisal at a best value price.

For more information about Professional Appraisal Associates, visit us at our Website at: ProfessionalAppraisalAssociates.com or feel free to call us at (805) 688-5033.