Monday, December 31, 2007

An unbelievable story of fraud rocks Bear Stearns in Atlanta

With a scheme that reads like a made for TV movie, a group of young and not so young hustlers managed to convince Bear Stearns to give them $6.8 million in real estate loans!

One of those loans was a mortgage to Calvin Wright and his wife for 1.8 million. With fraudulent papers, companies, and cohorts to back him, he is documented at Bear Stearns as being an investment banker, and papers show his wife to be a top officer at a marketing firm. The documentation shows that Mr. and Mrs. Wright were earning upwards of $50,000.00 per month, with assets to back them of roughly of $3 million. In reality, Calvin Wright is a telephone technician and earns about $100K per year, and his wife does not work outside of the home at all!

The FBI states that mortgage fraud cases now make up 28% of their workload, as compare to 7% in 2003. (2003 is probably just about when all these schemes were being cooked up!) Suspicious Activity Reports, which lenders are required to file, are up 700% from 2000 and 2006.

Estimates show that losses from mortgage fraud could total a record $4.5 billion for 2006, which is up 100% from the previous year. In some regions, it is widely thought that fraud accounts for about half of all foreclosures.

But, who is to blame for all this mess? There is no simple answer, and no one entity that is responsible. The fraud necessarily needs a lender, sometimes a broker, the criminal that is either forging documents or creating shell companies, appraisers that are willing to inflate values for a cut of the loan, and support companies such as the ones that produce the forged documents.

The stated income loan was truly a calling for deception, hence, it's nickname, the "liar's loan". A recent review of such loan documentation revealed that 60% of the loan paperwork overstated income by 50% or more.

Many lenders outsourced the verification process to brokers and competition became fierce to speed up the process and volume of paperwork that passed over each desk to keep business with the lender.

Overall, the most unbelievable aspect of the Atlanta scheme is that it was, in large part, perpetrated by a 23-year-old college dropout named Gregory Jerome Wings, Jr. aka G-Money. His cohorts included a young club owner, and a director of an underground documentary called "Crackheads Gone Wild", a tale of drug addiction gone overboard.

Maybe the lenders need to hire street folk to sniff out the scammers. I would bet that a large percentage of Atlanta's population knew who Gregory Jerome Wings, Jr. really was - and I'm sure some street folk would talk for some cash in hand.

So, the scheme went like most others. First, find some borrowers with good credit to apply for gigantic loans, using stated income terms, false income documentation and asset statements. Then, find a mortgage broker who was willing to submit the false documentation. Lastly, find an appraiser willing to over value the property. (It is important to note that no appraisers were indicted when the case was finally cracked - it was never found that the appraisers got any extra cut or dividend for over appraising the property - they were just desperate for work to stay alive!)

The same week that Mr. Wright obtained his $1.8 million dollar mortgage from Bear Stearns, he also obtained a $1.9 millions mortgage on a second property near Atlanta. This time the lender was BankFirst, a unit of Minneapolis-based Marshall BankFirst Corp.

Mr. Wright's attorney states that the crimes were incredibly easy, and as Mr. Wright made more and more cash, it was not difficult for him to talk other young people into joining him in his scam. Luckily, some Atlanta residents became suspicious when properties in their areas started selling for sky high prices and then were never occupied, and alerted authorities. One homeowner who assisted in exposing the fraud now carries a loaded handgun in his truck at all times. "We are putting people in prison for many, many years. This is serious stuff."

Though skeptics claim that this relatively inexperienced group of thieves should never have been able to carry this scheme on for so long and to such a high degree, the chagrined prosecutors for the lenders claim that these schemes were very sophisticated, an claim that they had no reason to doubt the authenticity of the forged and falsified documentation.

I am quite certain that many more tales like this one are going to come to light in the coming months. I sincerely hope that this will pretty much be a thing of the past by the third quarter of 2008 and the market will return to normal. Although "normal" may be quite different than it was five or ten years ago.

And, hats off to the appraisers who refused to play the game of grab the money and run! We will be the ones still standing when this whole mess is behind us and will no only not be in jail, but working again!

So, 'til next time, I say, it's all good!
Deb

Wednesday, December 26, 2007

More on the SEC probe into appraisal inflation for Washington Mutual

This is a sad, sad, state of affairs!

The SEC is investigating banking giant WaMu for allegedly having its loan officers pressure their appraisal management company, eAppraiseIT LLC, to increase values on properties that came in too low to make the loan.

An email has surfaced in which eAppraiseIT's president wrote that the company would "roll over" and submit to WaMu demands for higher appraisals. Later, in another email, he stated that the bank was in violation of federal regulations, which prohibit pressuring appraisers for value.

And, do you want to know what the saddest part of this whole mess is? eAppraiseIT LLC only pays $135.00 to the appraiser for a full single family 1004. So, for a third of the normal fee for an appraisal, some of these appraisers broke their own USPAP regulations just to get work in house. Which, sadly, is what sometimes happens when appraisers are desperate for work.

Appraisers have families that need to eat - they have house payments, car payments - children that expect a Christmas, just like everyone else.

Appraisal management companies were formed to put an end to hand picking appraisers and manipulating property values. Well, obviously, the situation has not changed, except that the honest appraiser is either not going to get any work at all, or be paid 1/3 of his entitled fee, while the crooked management company walks off with the rest.

Should be interesting to see how the rest of the story unfolds.....

And, 'til next time, it's all good!

Monday, December 17, 2007

USB and WaMu struggle to pull out of mortgage crisis

In articles released on the same day, mortgage giants Washington Mutual and USB AG both reveal massive losses and plans to regain footing in the mortgage market.

Of the country's top five mortgage lenders, Washington Mutual has the most at risk, with 29% of it's 2006 mortgages in the high cost category, mostly subprime, and an additional 15% backed by homes other than the owner's primary residence. WaMu has revealed that it expects a fourth quarter loss for 2006 due to a $1.6 billion goodwill write-down on its home-loans business. Shares have fallen almost 60% in the company's stock in the past 12 months.

Speculators are wondering whether banks such as J.P. Morgan Chase & Co. will look to buy out WaMu, as they have long been seeking to expand on the west coast. Also under speculation is whether Chief Executive Officer Kerry Killinger should still be running the company.
And, finally, WaMu announced that it will cut an additional 3,000 employees as it gets out of the subprime mortgage business altogether.

USB AG has announced that it will take a $10 billion writedown and is trying to sell a chunk of itself to the government investment arm of Singapore and an unnamed Middle Eastern investor. The fact that USB has always been considered a conservative lender is sparking even further alarm on Wall Street about the real effects of the mortgage meltdown.

USB is Zurich based and was formed from the 1998 merger of SBC Corp. and the Union Bank of Switzerland. It employees nearly 83,000 employees and reported a net profit of 12.26 Swiss francs in 2006. USB has never posted a full-year loss, mainly due to the strength of its wealth-management operations. It is unknown at this time if that record will hold for USB for 2007. Chief Executive Marcel Rohner states "This is a very bleak outlook" for the U.S. housing market. He is referring to the fact that banks and other lenders are looking overseas for investment help in this mortgage crisis, which could make for national security problems in the future.

Well, despite all of the gloomy news, I believe 2008 will be good for all of us in real estate as we all become more involved and creative in ways to clean up this mess!

And, so, as always, 'til next time, it's all good!

Tuesday, November 13, 2007

Fannie Mae and Freddie Mac encouraged to investigate loans from WaMu

Washington Mutual and eAppraiseIT are under investigation by Fannie Mae and Freddie Mac due to prodding by New York State Attorney Andrew Cuomo for allegedly pressuring appraisers to inflate value on properties.

At an investor conference in New York, WaMu said the outlook for the mortgage industry next year is bleaker than many believe, while shares of WaMu and other mortgage companies drop even further.

WaMu shares are down 56% this year and at their lowest point in more than seven years. WaMu, the country's biggest savings and loan, was the 6th largest US home mortgage lender in this year's first nine months.

Mr. Cuomo directed Fannie and Freddie to appoint examiners to look particularly at mortgages acquired from WaMu and any other loans made on the basis of appraisals by First American Corp.'s eAppraiseIT LLC subsidiary. Last week, his office filed a lawsuit against First American, alleging it violated federal and state laws by allowing WaMu to control the selection of appraisers hired to assess collateral for loans.

First American said last week the suit "has no foundation in fact or law."

WaMu said it will continue to ensure its operations comply with all applicable laws. WaMu also said both Freddie and Fannie have confirmed that they are continuing to purchase loans from WaMu "in accordance with their existing contracts."

Mr. Cuomo's staff isn't just looking at WaMu loans. He believes pressure on appraisers and inflated appraisals appear to be a very widespread problem in the industry.

Fannie Mae and Freddie Mac said they will both cooperate with the investigation.

Wednesday, November 07, 2007

Information Potpourri

Some tidbits of current information!

  • GMAC's loss grows to $1.6 billion as mortgage revenues fall. The auto and home lender division partly owned by General Motors continues to drag down the automaker's bottom line.
  • Citigroups shares fall 4.9% due to problems with the mortgage and debt market. The combined losses are estimated to by more than $30 billion, and many worry that more losses are in Citigroup's future.
  • The new relief bills for homeowners that were being touted in Washington have either stalled or dropped from the radar. So far, only one relief program, the FHASecure program, has been put into action, but with strict regulations. It is feared that the program will not help those homeowners most in need of assistance to keep from losing their homes.
  • Did you know of a piggyback credit card scheme that offers those with excellent credit to be paid to open accounts as authorized users for those with not such good credit? Then, the authorized users show an excellent FICO score and can qualify for the mortgage they would not normally be approved for. Industry experts state that much of the current foreclosure mess is due to score-inflation fraud.
  • Homeowners that are current on their mortgage are not eligible for any loan modifications. So, even though the homeowner may be acting diligently in foreseeing a future problem in making their payments, the lenders will not even consider them for modification until they are at least two months behind in their payments. Even though recommending someone to stop paying their mortgage sounds like bad advice, lenders are afraid that those that are current on their mortgage will take advantage of the modification system though they do not need it. Loan mods are expected to account for 5 to 10% of all loan activity over the next 12 to 18 months.

    Well, despite the bad news, I still say, 'til next time, it's all good!

Tuesday, October 30, 2007

Winter is nearly here!

I found a great, easy check list to see if your home is prepared for the winter cold. Remember your outrageous gas bills from last winter? These 4 steps can help reduce your heating bills by a few percentage points per month, which can add up to hundreds of dollars, depending on how unending our winter is this year!

  • First, make sure that all of your exposed plumbing is adequately wrapped. Though the wrapping itself will not save money on your heating bill, it will keep your pipes from bursting and costing you a lot of money for repairing the significant damage to your home. Heat tape should be applied to all exposed pipes, and exterior faucets should be drained and their water source turned off.

  • The proper insulation is the key to energy savings. Determining the type of insulation to use depends on a number of things. What type of home, how old is your home, how high are your ceilings, do you have a basement, and what type of heating/cooling system you use. The higher the R-value of the insulation you use, the greater the insulating power.

  • Caulk those windows and doors! If you're very ambitious, install weatherstripping on all doors and windows after you caulk them to cut drafts down drastically!

  • Don't forget to change the filter on your furnace. Many thermostats are now programmed to tell you when the filter has 500 or more hours of use on it. When the thermostat is flashing "filter", don't ignore it. Check the filter - it may or may not need changing. If it looks gray, then change it. Filters are relatively inexpensive and help your heating/cooling system work much more efficiently.

So, 'til next time, it's all good!

Thursday, October 25, 2007

So, let's talk about the other victims of the subprime meltdown....

Not to be forgotten in the midst of the mortgage slowdown are all the brokers, loan officers, processors, and administrative staff that have lost their jobs and are now, ironically, struggling to pay their own house payments!

Since August 2007, scores of lenders have down sized their staffing or disappeared altogether.
Countrywide's Full Spectrum Division laid off 6 employees from it's Troy office; the staff was only 16 total to begin with.


Franklin Mortgage Funding in Southfield laid off 120 employees in 2007, Aegis in Troy let 25 people go, Option One in Novi eliminated 30 positions, and American Home Mortgage in Farmington Hills has lost 25 employees.


More layoffs are announced daily, as more lenders face liquidation of their subprime divisions. Lehman Brothers Holding, Inc., closed its subprime division altogether, laying off 1,200 workers at 23 sites. In Scottsdale, 1st National Bank Holding Company closed its wholesale home mortgage unit and cut 541 jobs. Accredited Home Lenders Holding Company added 1,600 more employees to the unemployed roster.


Banking giant HSBC closed a main financing office and cut 600 jobs in August of this year.


All told, more than 40,000 workers have lost their jobs at mortgage lending institutions. A senior analyst with Celent, a Boston-based financial research and consulting firm states "It's far from over. The subprime lending collapse will continue to ripple through the financial sector."


When the market was booming, mortgage lending jobs were often lucrative even to those with little experience. Many that have lost their jobs are returning to the work they did before the housing boom, or enrolling in classes to learn an entirely new trade.


We often forget that it is not just the families losing their homes that are suffering these days!


So, let's try to all be supportive of each other!
And, I still say, 'til next time, it's all good!

Thursday, October 18, 2007

U.S. Treasury Secretary Henry Paulson comments on current housing correction

There just is not any good news for those of us in the real estate industry, on any facet, these days.

Last Tuesday, U.S. Treasury Secretary Henry Paulson gave a sobering speech at the Georgetown University Law Center. His gravest point was that the decline in the housing market poses "the most significant current risk to our economy."

He went on to say that the housing correction is not turning around as quickly as it previously may have appeared, and "it now looks like it will continue to adversely impact our economy, our capital markets, and many homeowners for some time yet."

It is not only the subprime borrowers having trouble paying their mortgages, he explained, by many other homeowners are having problems as the prime mortgage rates also increase.

Mr. Paulson has come out in favor of developing a uniform national licensing and monitoring system for mortgage brokers to alleviate future meltdowns. He is skeptical of legislative efforts to complete ban such practices as prepayment penalties. He believes that each homeowner's case has to be judged appropriately.

He also warns about too much government intervention to bail out lenders or property speculators, as such actions tend to lead to repeat offenders, rather than cleaning up the problem. He is encouraging lenders to work with their customers that are in arrears and attempt to rework their loans to an affordable level.

And, I say, if Michigan survived the 1980's, we will come back from this, also!
And, so, 'til next time, it's all good!

Friday, October 12, 2007

Political finger pointing in the mortgage meltdown....

The Democrats and the White House are still bickering over the best way to assist the many homeowners facing foreclosure due to interest rate resets and job loss.

The Democrats, including House Financial Services Committee Chairman Barney Frank, Senator Charles E. Shumer of N.Y., House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, have proposed a temporary increase in the portfolios of Fannie Mae and Freddie Mac, along with creation of a position that would oversee a limitation on foreclosures.

Republicans, including the President, have fired back at Democrats for not taking action legislatively. They say that they have heard a lot of talk from Congress, but no action and no plans on the table.

Republicans also are not in favor of creating a new position to oversee the foreclosure problem, and believe that Housing and Urban Development Secretary Alphonso Jackson and Treasury Secretary Henry Paulson are doing enough to alleviate the problem by meeting with mortgage counselors, lenders and servicers.

So, the beat goes on....

As always, 'til next time, it's all good!

Monday, October 08, 2007

Updates on the FHASecure Program to assist homeowners whose interest rates are resetting

Here is the latest on the web concerning the FHASecure Program, designed to assist homeowners who can no longer afford their mortgage payments due to an interest rate reset:


  • CountryWide has already launched the program and, as of last week, 35 loans have already been originated.
  • First Horizon National Corp. in Memphis is ramping up to begin their participation in the program.
  • There are strict rules for the FHASecure program - first being that the mortgage must be 30 days delinquent due solely to the interest rate reset.
  • Ironically, the FHASecure program cannot be used to refinance an FHA loan.
  • The homeowner must have made six consecutive payments on time prior to the interest rate reset to qualify.
  • Homeowner must have 3% equity in home to qualify.
  • Some lenders may even issue this loan when the homeowner has been or is in bankruptcy.

If you cannot qualify for the FHASecure program, try the Neighborhood Assistance Corporation of America based in Boston. To qualify, the homeowners interest rate must be 10% or more and you must have had your mortgage for at least two years.


There will surely be more programs popping up, and I will keep you informed.

So, as always, 'til next time, it's all good!

Monday, October 01, 2007

Where To Eat In Metro Detroit Area?

Since I could not find anything nice to say about the world of real estate, real estate financing, or the State of Michigan's economy today, I will not discuss those subjects at all!

Let's talk about something that we all love - food! Though I do not eat out much, I do like to know which restaurants those that do eat out often recommend. AOL Local/Detroit did a poll and here a just a few of the results:

Best Barbeque:

  1. The Bone Yard Restaurant - 30843 Plymouth Rd., Livonia 734-427-6500
  2. Chicken Shack - 4040 E 11 Mile, Warren 586-758-2888
  3. Memphis Smoke - 100 S. Main St., Royal Oak 248-543-4300

Best Chinese:

  1. Mon Jin Lau - 1515 E. Maple Rd., Troy 248-689-2332
  2. Peking House - 215 S. Washington Ave., Royal Oak 248-545-2700
  3. New Peking Restaurant - 29105 Ford Rd., Garden City 734-425-2230

Best Family Style:

  1. Elias Brother's Big Boy - 31270 John R. Rd., Madison Hts. 248-588-6600
  2. National Coney Island - 1812 N. Main St., Royal Oak 248-398-6111
  3. Rainforest Cafe - 4310 Baldwin Rd., Auburn Hills 248-333-0280

Best Italian:

  1. Andiamo Italia - 7096 E. 14 Mile, Warren 586-268-3200
  2. Roma Cafe - 3401 Riopelle St., Detroit 313-831-5940
  3. Lelli's - 885 N. Opdyke Rd., Auburn Hills 248-373-4440


Best Mexican:

  1. Xochimilco Restaurant - 3409 Bagley St., Detroit 313-843-0179
  2. Mexican Village Restaurant - 2600 Bagley St., Detroit 313-237-0333
  3. Mexican Fiesta Restaurant - 24310 Ford Rd., Dearborn Hts. 313-274-3066

Best Pizza:

  1. Buddy's Pizza - 8100 Old 13 Mile Rd., Warren 586-574-9200
  2. Amici's Pizza - 3249 12 Mile Rd., Berkley 248-544-4100
  3. PizzaPapalis - 553 Monroe St., Detroit 313-961-8020

Best Seafood:

  1. Charley's Crab - 5498 Crooks Rd., Northfield Hilton, Troy 248-879-2060
  2. Mitchell's Fish Market - 117 Willits St., Birmingham 248-646-3663
  3. Big Fish Seafood Bistro - 700 Town Center Dr., Dearborn 313-336-6350

To read the entire survey, please visit http://www.cityguide.aol.com/detroit
Feel free to comment on any of the winning restaurants, or to add your own favorites.
As always, 'til tomorrow, it's all good! (And I have to go get something to eat now!)

Monday, September 24, 2007

Quick facts on the new FHA bailout program

  • Borrowers must have at least 3% equity in the home. That requirement alone is going to eliminate many borrowers who now owe more on their home than it is worth.
  • More than a quarter of subprime borrowers have missed a payment before their rates reset. That is a fact making political solutions more difficult.
  • About 48% of the subprime borrowers won't qualify to refinance into a mortgage that conforms to the new standards given by Fannie Mae and Freddie Mac.
  • The 1/2 point interest rate cut just passed by the Federal Reserve will do very little to help those whose mortgages are adjusting.
  • U.S. home prices fell by 3.2% in the second quarter of this year, setting a new record.
  • It would take nearly 10 months to sell off all the existing homes on the market right now; the longest amount of time in at least 8 years.
  • The average increase for a rate reset is 26%, or about $400.00 per month.

Here's hoping that there will be better news to relay to you next time!

As always, 'til next time - it's all good!

Tuesday, September 18, 2007

Remember your gas bills from last winter?

If you live in the NE portion of the United States, chances are your heating bills last winter were nearly as much, if not more, than your car payment!

If you are thinking about ways to save energy this winter and are in the market for a new furnace, the following information may interest you.

What you may not know about heating with wood:

  • Wood is environmentally friendly. It may not seem so, since trees have to be cut down, but trees are a renewal source of energy. Trees are also carbon neutral; that is, they absorb carbon dioxide while living, and release carbon dioxide whether they burn or decompose. Fossil fuels, on the other hand, are a one way street - only releasing green house gasses that have been captured deep in the earth for millions of years.

  • Wood can save money. With the new generation of high efficiency hydronic furnaces (or wood boilers), the heat generated is much more intense than in the older furnaces and very little is lost up the chimney. These new furnaces can be used as a secondary heating method and have been shown to save up to 70% in reduction of oil, propane, and natural gas heating bills.

  • Wood can be clean. Because the new furnaces burn wood at much higher temperatures, there is almost no smoke. Also, there is very little ash and the firebox only needs to be cleaned once a month, rather than every day. And, the furnace can be installed outdoors, eliminating the need to lug your logs through the house.

  • Wood is safe heating method. Of course, as with any type of heating material, the proper precautions must be taken. Be sure to look for a wood boiler system that is both UL and CSA approved.

  • I cannot recommend a brand for you, as I don't yet have a wood burning system, but if you are interested in researching your possibilities or want more information, visit www.greenwoodfurnace.com

Happy Burning!

And, as always, 'til tomorrow - it's all good!

Thursday, September 06, 2007

More good news for the struggling real estate market!

The Wall Street Journal's on-line Guide to Property announced today that federal and state banking regulators are urging lenders and investors to restructure the loans of homeowners with interest rates that are resetting to amounts beyond their means to repay.

Many of these same loans are no longer on the books of the original lender, and so have been extremely difficult to rework with the homeowner. There will be fewer negative tax of accounting implications for those lenders and investors who buy these loans to restructure.

This is just one other initiative coming out of Washington to assist everyone in the housing industry - especially those homeowners who could afford their house payments until their interest rates reset.

Spokespeople for the National Consumer Law Center are encouraged by these new actions; stating that the consideration of loan modification is on it's way to becoming a standard practice.

As always, 'til tomorrow, it's all good!

Wednesday, September 05, 2007

Help from Washington for the Mortgage Industry

It was announced Friday, August 31st, that HUD will offer help to an estimated 250,000 families to avoid foreclosure on their homes by allowing them to refinance at a lower rate. This aid is available immediately.

And, in addition, HUD will launch it's new FHASecure plan in January, 2008, which will allow families that had strong credit histories before their interest rates reset to qualify for refinancing. These new programs will charge a risk-based premium based on the borrower's credit profile. Those with riskier credit will pay a higher insurance premium.

FHA transactions are expected to surpass 100,000 loans by the end of this fiscal year. And those figures do not include refinancing for delinquent borrowers.

To qualify, homeowners must meet the follow criteria:

  1. On time mortgage payments before interest rate reset.
  2. Interest rate reset between June 2005 and December 2009.
  3. 3% cash or equity in home.
  4. Sustained history of employment.
  5. Sufficient income to make the new payment.

For more information, call 800-CALL-FHA or visit www.fha.gov and look through your old files to see if you have customers that may need your assistance with these new programs.
And, as always, remember that we are FHA certified and would love to do business with you!

Saturday, August 25, 2007

So, who were the real winners in the real estate boom?

The way I see it, no one in the United States has had any long term gain from the craziness that was the real estate bubble of the last five years or so.

The big lenders that issued the "liar's loans" and sold them to foreign investors are now being forced to buy back some of those loans, and are therefore in financial trouble and are either closing their doors or laying off their staff.

So, if the lenders didn't gain, what about the loan officers and brokers? Well, if they were human like the rest of us, they all went and bought new homes and new toys when business was good, and now have no jobs and are going to be in the same foreclosure boat as the rest of the Joe Schmoes out there rather quickly. Or, worse yet, some of them are going to face prosecution for predatory lending - and do you think the big lenders that they were working for are going to pay for their defense? I think not...

So, if the lenders, loan officers, and brokers didn't gain, how about the appraisers? Well, the appraisers that played along with the game are sitting on the hot seat now, and some may well face criminal prosecution for mortgage fraud. And do you think the lenders that they were playing the game with are going to defend them? Not a chance! And the appraisers that refused to play the game are hurting, too, as orders slow down to a small trickle......it would help us reputable appraisal companies if lenders would remember that we have been on the up and up all along.

So, if the lenders, loan officers, brokers, and appraisers didn't gain, how about the homeowners? Sure, they got their homes with little or no money down, with forged documentation, or with a little fudging of the numbers here and there, but where are they now? Many have lost their homes completely and all of the hard earned cash they have paid into their mortgages. There are nine vacant homes just on the two sides of my block here - do you think that helps the market value of my home? (Not to mention, it breaks my heart to look at them every day!)

So, if the lenders, loan officers, brokers, appraisers, and homeowners didn't gain, how about the investors that are "snapping" up these bargain bank owned homes? Well, I just looked at roughly 200 listings of foreclosed homes in my city, and only about 20 of those listings were below the estimated market value of the property. Most were listed at MUCH higher prices than the real value of the property (just my opinion - but I have lived here all of my life and have a pretty good idea what a home is worth, right here and right now). So, I see a minimal number of "bargains" out there and so what if an investor does buy a "bargain"? Who is he going to sell it to? No one can get a mortgage now unless you are a "Rockefeller"! And, let's not even talk about renting it! To whom? The only jobs available in our area don't pay enough to afford to live in your parents basement, let alone a home!

So, in all of this big mess, guess who the only winners were? The foreign investors - who not only made big dividends on the risky loans when business was good, but can now force many of our big financial companies to their financial knees by forcing them to buy back a majority of the defaulted loans......way to go, America! But, I have faith that Americans are smart and compassionate enough to figure out how to fix this mess now....and I rack my brain daily for some answer. I just hope we can remember this the next time we are tempted to take a ride on Easy Street....

Tuesday, August 14, 2007

This is a sad blog for me to post...

August 14th, 2007 5:36 PM

If you have tried to contact us in the last couple of weeks and things seemed a little crazy here, it is because half of the office had to rush to Arizona. On July 25, 2007, my adored little grandson passed away in Casa Grande, apparently of SIDS.

I have yet to come to terms with this tragedy, but working helps me from losing my mind. He was a remarkable child and my heart is forever broken.



The following is his eulogy.




July 30, 2007
Deborah A. Seivers
A Letter To My Grandson










Dear Oliver, my precious little man,


From the very moment that I looked into your eyes, though I was thousands of miles away from you, I knew that you were an extraordinary baby. You were far more awake and alert than any other newborn that I had ever seen. When I finally got to hold you in my arms, you quietly studied my face for the longest time, like you were trying to memorize every detail.
I pulled Mama’s rocking chair up to the side of your crib that first night and held your little hand. I would doze off now and then, and every time I awoke, you were watching me; shining a light on my heart and looking right into my soul.


We are all here because you touched us all. We all carry a special memory of a special moment with you. And, so, in return for all that you gave to us, we all make these promises to you today, Oliver – our precious little man.
  • We will not become splintered with sorrow – we will honor your happiness by welcoming joy into our hearts.
    And, then, we will pass it on.


  • We will not descend into despair – we will honor your exuberance by rocking to the music of our lives.
    And, then, we will pass it on.


  • We will not become worn with weariness – we will honor your endless energy by stepping eagerly into each new day.
    And, then, we will pass it on.


  • We will not deaden our hurt to dullness – we will honor your curiosity by exploring that which is new and different to us.
    And, then, we will pass it on.


  • We will not be broken by bitterness – we will honor your sweetness with a smile for a stranger.
    And, then, we will pass it on.


  • We will not succumb to stupidity – we will honor your intelligence by seeking wisdom and growth.
    And, then, we will pass it on.


  • We will not infix ourselves in isolation – we will honor your friendliness by reaching out to each other.
    And, then, we will pass it on.


  • We will not become fractured by fear – we will honor your sense of daring by attempting that which daunts us.
    And, then, we will pass it on.


  • We will not anchor ourselves with anger – we will honor that twinkle in your eye with the acceptance that dark days will sometimes come into all of our lives.
    And, then, we will pass it on.


  • We will not harden ourselves with hate – we will honor your love by holding each other close.
    And, then, we will pass it on.
So, you see, my dear Oliver, my precious little man, by all of us keeping these promises that we make to you here today, your little life will change the world.
And, now, I understand, my sweet little Ollie Boo, why it was so important to you that I listen to what your bright little eyes were saying to my soul.



Love always – until we meet again.
Grandma D

Thursday, July 19, 2007

The Saga of A Mortgage Broker

Appraisal Pros Prose

Saga Of A Mortgage Broker

July 19th, 2007 10:11 AM

I found this story interesting - just another one of thousands of sad, sad stories of the greed, fraud, and crime that accompanied the housing frenzy in the last 10 years that will continue to haunt every aspect of all of our lives for another 10 years!

The Saga of A Serial Broker:

Name: Altaf Shaikh

State of Business: California

1989: Altaf comes to US from Pakistan and begins work at a Taco Bell and sells leather jackets at a flea market.

1994: Takes a job as a car salesman and averages $3,000 per month.

1997: Encouraged by a friend, takes a job as an assistant manager at Ameriquest Mortgage Co., then a small subprime mortgage lender.

1999: Moves to Atlantic Financial Mortgage's San Jose branch.

2000: Hired as assistant to a loan officer at Home Advantage Corp. in Fremont.

2001: Signs on at Hampton Financial in San Jose. In the same year, he opens his own office where his business is called West Coast Marketing. He scouts for potential customers and assists them in filling out mortgage applications to send to Hampton Financial.

2002: Hampton terminates relationship with Shaikh due to borrowers' complaints.

2003: Altaf moves on to Golden Gate Mortgage in Hayward, California. Uses an alternate name - Zak Khan. Buys a $2M home with swimming pool.

2004: Moves on yet again to Secure Financial, where he brokers loans using the name Atlya Khan.

2005: Honored by World Savings Bank, along with Secure Financial, with a "Top Broker Award".

Present: Working as a car salesman once again in the Fremont, California, area.

In May 2007, Mr. Shaikh, 46 years old, pleaded no contest to charges of grand theft in a plea agreement with 9 California counties. He lied to borrowers about the terms of their loans, forged documents, and had checks written to companies that he controlled without the borrowers' knowledge. Zak Khan will be sentenced in August 2007 and will hear the amount of restitution he must pay and find out if he will serve the one year jail term requested by prosecutors.
Not present at the hearing will be the hundreds of borrowers scammed by Mr. Shaikh, including the elderly and the poor. Though some have sued the unlicensed broker, their chances of ever collecting a dime seem slim.

One year in jail seems a very light punishment for someone who has taken such advantage of those in desperate situations......

'Til next time - it's all good!

Tuesday, July 03, 2007

Does It Really Matter Who Tells You How Much Your Property Is Worth?

Appraisers have been accused of "sour grapes" on the whole AVM vs. human valuation of residential real estate. So, just out of curiosity, I ran six addresses that we appraised in the last six months through the Zillow software to see how close the numbers would come up. I was shocked at the results! I had always assumed that Zillow would tend to overvalue property and that only fueled homeowners' beliefs that their property is worth more than it really is. But, not one property came in at the value that we appraised it for! In fact, every single property came in on Zillow for thousands less than we appraised it for! The smallest difference was a paltry $12,000.00 (enough to make or break a purchase or a refi, for sure!), and the largest difference was an astounding $280,000.00! Averaged over the six properties I researched, Zillow undervalued properties at $141,000.00. There are many factors that contribute to the differences, but no matter which side of the argument you are on, the numbers prove that there is no substitute for the human factor in property valuation!
I read a great article recently, also, in The Detroit Free Press about AVM vs. Appraisal. It was written by Kenneth R. Harney, who is the Washington Post's real estate guru. He says, "Bottom Line: Even FNC calls appraiser-collected data "the gold standard." AVMs can be useful starting points - although Zillow's free "Zestimates" have been criticized for frequent inaccuracy by a variety of groups,.......If you truly want to know what a property is worth, don't settle for less than an experienced appraiser, live and on site."
To read the entire article, visit washingtonpost.com and search for articles by Kenneth R. Harney.
I welcome comments on both sides of this argument! Have a great day!

Friday, May 25, 2007

Oh, Happy Days!






So, let's start with some good news and pics of those dear to my heart!





On May 11, 2007, my beautiful, sweet little girl , Danielle Marie, married the man of her dreams, Roger Dale Reynolds, Jr. They are an adorable couple and we are all very happy for them! We are postponing the wedding reception until August, so family members who are in the Armed Forces may attend.



What a whirlwind of events during their wedding week! My other beautiful, sweet little girl, Hannah Catherine, came home from Arizona, and brought her beautiful, sweet little boy, Oliver Andrew! (He is the love of MY life - sorry, hubby!)


And, in the middle of all of this commotion, my handsome, sweet son's beautiful, sweet girlfriend, Sarah, threw him a surprise 30th birthday party. You may witness from the photos (they all look much too happy!), that I was not in attendance at this party - I had the honor of keeping company with my first grandchild, Oliver.

Oh, Happy Days - I promise not to bore you often with all of this sweetness! We will get back to business next week!



I now have a live blog on my website, so I will just copy and paste news from one to the other. My website blog is not as pretty as this one!













Photos: Danielle and Roger on their wedding day
Danielle, Hannah, and Jacob at his surprise 30th birthday party.

Jacob and Sarah at his surprise 30th birthday party.

Oliver Andrew - the love of my life!

Tuesday, February 06, 2007

Breaking News

BREAKING NEWS

Ford's 2006 loss totals record $12.7 billion.....

Pfizer to Lay Off 10000, Close Plants in Cost-Cutting Moves.....

Michigan's average unemployment rate for the first ten months of 2006 has been 2.1 percentage points higher than the corresponding national figure.....


Okay, so none of this is "breaking news"! We all know firsthand how Michigan is suffering, again! Having lived here all of my life (with the exception of two years spent in New Mexico when I was young and adventurous), I know that this is the downside of a cycle that we will pull out of and Michigan will survive, if not flourish!

With that thought in mind (I mean the thought that Michigan will turn around again!), I opened this company last year; and at that exact same moment, the real estate bubble burst....and no, that was not part of my business plan! But, like Michigan, Appraisal Pros has just kept plodding along, always thinking forward, doing everything we can think of to reach our customers.

In the nine months that we have been operational, we have contacted thousands of potential customers, done mass mailings, practiced guerilla marketing over the internet (sorry about that!), hosted a contest, and printed dozens of different coupons. We are registered with at least 30 appraisal management companies (one of them must be yours!), and are listed in over 40 internet directories. We made sure to have the best possible technology upon opening, and even learned how to use it all! I have done the necessary networking, made personal deliveries of our introductory packet; in short, done everything that I know to do that is within our budget to attract your attention.

So, do you want to know what the "breaking news" is?

In spite of the fact that 90% of our contacts are Michigan based, only 2% of our orders are coming to us from Michigan companies!

We have received orders from companies in:

Irvine, California
San Ramon, California
El Segundo, California
Lake Forest, California
Warwick, Rhode Island
Pittsburgh, Pennsylvania
Raleigh, North Carolina
Knoxville, Tennessee
Chicago Heights, Illinois
Toledo, Ohio
Frisco, Texas

and we are very appreciative of all of our new friends and customers!

And, we have received a handful of orders from our wonderful Michigan friends in Taylor, Oak Park, Southfield and Brighton.

But, if Michigan companies don't help each other, who the heck will?

So, come on, we are not asking for all of your appraisal business!

If each of our Michigan contact companies would send us one appraisal a month, we would be rockin'!

Now, if all of our wonderful Michigan contacts and friends send us one appraisal all at the same time, we will be in trouble! So, just keep us in mind over the coming weeks and send a little work our way!

I know it's hard to leave your comfort zone and do the extra work to take on someone new. But, with Michigan losing jobs faster than any other state, it is important that we support each other, and help sustain the new entrepreneurs out there!


And, now, for the other breaking news! Let me introduce you to my first grandchild, Oliver. He was born December 16, 2006; just a little peanut at 5lbs 6oz. But, he is gaining quickly now! He is wonderful! But, sadly, he lives about 3 thousand miles away in Arizona and cannot yet talk to me over the phone or the computer.....I did get to meet him for a few days in January, and am hoping to get back there soon!
















Questions?

I am posting this on my blog space, also, which you can locate near the bottom of the home page of our website http://www.appraisalpros.biz.

I guess it is possible to respond to a blog, though I have never attempted to do so. Please feel free to respond to our "breaking news" through my blog page, if you'd like, or ask us any questions that you may have.

Or call us at (313) 292-3200 if you have any questions or need more information from us.
Hope to hear from you soon! Thx!