Your MN Mortgage Mom's Blog

Hey All,

It is time again to take action.  Yes, this is in regard to YOUR INCOME...YSP and SRP.  This is in regard to having the ability to continue to offer valuable services to our clients.  This is about NOT letting our government create order takers out of us by being paid no better than a minimum wage. 

If you are like most, you have not read the entire, long legalize documents of the bill...or understand it if you did make an attempt to read it.  Want to hear what the Federal Reserve is proposing right now to destroy our income?  Download the link below.  It is a call with Sue Woodard, Barry Habib and Paul Mondor.  Paul Mondor is an attorney working with the Feds to do away with our income.  THIS IS SHOCKING AND FRIGHTENING.  What they are attempting to do is a joke.

Phone Interview

Why do I bring this to your attention?  Because it is time to TAKE ACTION again.  There is a grass roots effort in an attempt to OPEN UP THE COMMENTS again on this bill.  People, you may be busy...we all are.  If you care about this business at all, your income and your livelihood, MAKE TIME to do this.  There is a CALL TO ACTION that will take a whole 5 minutes of your time.  If you want to take even more time to understand the plea for action, you can listen to the video link on the website.  Go to www.frbcalltoaction.com.  No time right now?  No problem.  Get up an hour earlier or stay up an hour later.  Please...just take action.

Have a terrific weekend all!

MN homeowners, like so many other states, are facing this same dilemma.  What should I do?  How do I protect myself?  What is the best recourse for my own personal circumstances?

• Should I refinance under HARP?
• Should I modify under HAMP?
• Should I try to short sale my home?  Heck, what IS a short sale?
• What about foreclosure?

Before you go down any of these roads, EDUCATE yourself first.  Align yourself with experts.  Knowledge is KING.

Any of these possible solutions can bring risk.

• If I refinance under HARP, what kind of loan program will I be put into?
• If I modify under HAMP, how does that affect my loan and what are the terms?
• If I short sale, what about deficiency judgments?  How do I know if I have an experienced agent?  Who negotiates with the bank and what is their track record of success?  Will it hurt my credit and how much?
• Who can tell me about foreclosure and the upsides/downsides?

If you don't know, ask.  If you don't know who to ask, ASK ME.  As a consumer advocate and industry professional I can offer guidance and the best resources available.  What does the MN Mortgage Mom get out of this?  Reassurance that you have the information you need to make educated decisions and are in the best possible hands should a short sale be your solution.  And there in lies a lot of peace for this "Mom".

I'm certainly not an appraiser or an expert on home values, but being in the biz as long as I have, I do have a fairly good understanding of appraised home values and the ever restrictive lending requirements behind it.

For many who have had an appraisal done in the past year or so, may be able to attest to this blog's title.  The appraisal was done and you were shocked that the value came in so low.

"But I just spent $25,000 for this beautiful landscaping!"  In this day and age, that is called over-improved.  You just spent a lot of money that did not increase the value of your home.

"But there was a home just like mine that just sold last April 2009 and you're telling me that my home is $75,000 less than that one?"  Umm, yep!  That home that sold just like yours almost a year ago is not even a viable comparable at this point.

So, what gives?  How is a value determined?

Let's get the predominating factor out right away:

Your home's value is PRIMARILY DICTATED by like style homes that have sold within the last 6 months, within a 1 mile radius of yours.  Period. 

(Now, obviously, if you are in a rural area or have very unique characteristics, that guideline is stretched.  But for the typical suburban area, this holds true.)

Let's break this down a bit further:
The homes that have sold in your area are what the industry calls "Comparables".  Your home's value is dictated by these comparables.  And it cannot be just any comparable, rather it has to "fit" within guidelines.  When looking at comparables to a subject property (your home), the basic criteria need to be met:

• Comparable homes must be the same style of home as yours.  You cannot compare ramblers with two stories.
• The comparable homes need to be within a 1 mile radius of your home (some lee-way for extenuating circumstances)
• Those comparables should have the same number of total rooms that yours does.
• The comparables must be similar in square footage and age (with some wiggle room for adjustments)
• The comparables must have been sold within the last 6 months.  Homes that are older in sales are not viable comparables.  Lenders take this a bit further and also require that at least one of the comparables be sold within the last 3 months.
• The appraisal report is required to have a minimum of THREE comparables to your home and TWO comparables that are active/pending listings for a TOTAL OF FIVE.  Of those, your home's value rests somewhere between.  In other words, your value cannot be the highest number of all comparables.  The comparables MUST bracket your value.

Whew!  Did you take all that in?  Here is my message...before you decide to spend major dollars on renovations to sell your home or refinance, first understand your immediate, neighborhood housing market.  You may want to ask your local RE agent to assist you with a comparative market analysis.  You don't want to spend your hard earned money for a dismal ROI.  And personally, I do not want to be making that call only to hear, "What!  My home is only worth what?  Are you crazy??"  Why yes I am, but that just made the MN Mortgage Mom a little more crazier.