Life In Bonita Springs

HVCC The Mortgage Killer

Whether you live in Bonita Springs, Florida (Lee County) or Eustis, Florida (Lake County) or even Palm Beach Gardens, Florida (Palm Beach County), or anywhere in the USA for that matter, your needs to finance a home loan mortgage may be killed thanks to a wonderful idea called Home Valuation Code of Conduct, or HVCC.

What is HVCC? Quite simply it is government intervention that forces a total hands off involvement of the appraisal process in determining a property value for the purpose of financing.

Who is hurt by this? The Appraiser and the borrower.

The Appraiser:

1. Forced to join a management company that will collect up to 40% of the appraisal fee. Yes, that is right.  The appraiser will now lose almost 50% of his/her income by being forced to join in order to keep working.
2. Only targets appraisers.  Other valuation models, such as AVM (Automated Valuation Models) and BPO (Broker Price Opinions) are not affected.  This will lead lenders to accept these values (which are less accurate) due to the less restrictions.
3. No communication between the broker or lender or anyone else that stands to earn money from the deal.  Single handedly destroyed all relationships with these entities literally overnight.

Borrower:

1. If a new lender is needed, a new appraisal is needed.  In the past, the Broker could simply submit their appraisal to the new lender.
2. Increased time to fund loans.  Lenders and Brokers can no longer communicate with Appraisers to expedite orders, which means longer rate locks (IE Higher interest rates).
3. Forced to stick with current Lender even if not what they want because of increase fees to having to obtain a new appraisal.

And there is one big issue that surrounds this whole crazy plan… what is the real estate worth?  Well, now without the communication from the broker or lender, an appraiser is left to appraise the value of the property.  Sounds good in theory, but let’s look at reality.

Appraiser is given an order to appraiser property 123 Main Street, Anywhere, USA.  Appraiser is not told the loan amount or an estimated value on the property. (PROBLEM 1: IN THE PAST, AS A COURTESY, THE APPRAISER WOULD CONTACT THE BROKER TO SAY YES OR NO ON THE ESTIMATED VALUE BEFORE WASTING ANY ONE’S TIME OR MONEY.)  Appraiser determines value of property, but to keep in good favors with the management group and to avoid future legal actions for why they valued the property at $x.xx shaves several dollars off the top.  (PROBLEM 2: THE ORIGINAL VALUE MAY HAVE BEEN THE RIGHT NUMBER TO DO THE DEAL, BUT TO PROTECT THEMSELVES AGAINST A NOW UNKNOWN, THE DEAL IS DEAD.)

Real life scenario: Borrower wants to refinance house.  Eligible for RefiPlus, so we can go to 105% of the appraised value.  Appraisal was ordered.  Cost $400.  Original appraisal cost before HVCC $350.  (Appraiser needs to charge more because he has to pay someone now.)  We needed at a minimum $x.xx to make the deal fly, but appraiser does not know this.  Appraisal took over one week to obtain, when in the past took only 48 hours.  Appraisal is returned with a value of $10,000 less then $x.xx.  Deal is dead.  Borrower is out $400.  Broker is penalized by lender for fallout of locked loan.

Had this been pre-HVCC. The appraiser could have said it will be a tight deal on the value and let the borrower decide on whether to proceed.  Now, the borrower is out $400 and had no decision.  Pre-HVCC, the appraiser would have looked harder for comps to get the value that was needed just to keep the relationship with the broker/lender. (There is nothing wrong with this provided that the comps are there and justifiable.)  Pre-HVCC would have allowed the borrower to get a 15-21 day rate lock offering a lower interest rate, instead of a 30 day lock or floating the rate in the current volatile market.

HVCC is a big deal when it comes to financing your home.  It costs you, the borrower, more money to finance real estate.  It eliminates your options to shop with multiple lenders when using a broker, which means you might not be getting the best deal.  It is just all around bad news.

Help us help you in getting your rights back when financing your mortgage loan.  A moratorium is being requested for 18 months.  Should this happen or even if it does not, contact your state legislature to voice your opinion on the issue.  Or take the time to sign a petition against HVCC.

Jason Price

Owner/Principal Broker

(352) 308-7219 Phone

For some time now, Knightlines Mortgage Services has been offering the people of Florida a convenient way to finance and re-finance their residential property.

But that isn’t the entire story - we are also doing commercial lending in all 50 states.  AND - now we can offer commercial financing OUTSIDE of the country as well.  Caribbean, South America, etc - just call for the details.

Top Secret Park Entry on Riverside Drive

Everyone knows how to get to Riverside Park from Old 41 or Pennsylvania Avenue.  Did you know there is a secret foot path from South Riverside Drive just off of West Terry Street?  Well, there is.  This is how you find it … if you know where South Riverside Drive is look for that tree up above.  If you don’t know where South Riverside Drive is here is a map.

Across the street from that cool Wizard of Oz tree is this sign and walk way.  It’s a WALK way.  There is no parking lot.  You should probably be walking or at the most on a bike.  No cars.

Here’s a closer look at that sign:

After you go through the entry you get to walk by a very pretty garden that a private home owner keeps.  No touchie!  He’s a very nice man, by the way, and told me all about the owls that live back in the park.  You should probably look for owls back there, by the way.  A dozen yards in you’ll see this: 

Half way over the bridge look to your right and you’ll see this:

If you want to see the rest of Riverside and Island Parks in greater down town Olde Bonita Springs, Florida you’ll have to take a walk back there yourself.  The park is free, by the way, so it would be a great thing to do with your family.    If you’re looking for things to do in Bonita Springs take a Frisbee or something and enjoy the parks that are sitting there waiting.

Check out the park I “enjoyed” last week [sarcasm]:

Estero Bay Preserve State Park | Estero Florida

Actually, parts of SW Florida hit bottom months ago.  Since you’re a regular reader you already knew that.

Motivation: Selling Is The Ultimate Goal

One of the most common questions you’ll hear while a real estate discussion is going on is; how motivated is the seller? Given the climate of the current real estate market it would seem that most sellers would be motivated. In reality, the ad running for their property may say they are but most of them aren’t.

There is a huge difference between motivation to sell and desire to sell. The word “motivated” has now been used in real estate circles to the point where the meaning has been watered down. It’s right up there with “won’t last long” and “must see”.

Recently, I helped buyers work their way down the street of a production build neighborhood trying purchase one particular floor plan. It occurred to me that, in spite of what the listing notes read, most of the sellers weren’t motivated they just had a strong desire to sell. Most of the homes weren’t priced appropriately. They were priced at what the seller wanted to net, not what the recent sales supported.

I’m not faulting sellers for trying to make as much money possible or trying to contain as much of the loss as they can on their real estate transaction. I’m just questioning their degree of motivation to sell when the property isn’t priced correctly and they then get offended by an offer at market price.

Motivated sellers have been prompted to sell. They’ve come to the realization through balancing the inventory supply, holding costs, recent comparable closed sales and their own personal financial situation that their real estate must be sold. They’re willing to negotiate with a buyer and move on from the transaction. They’re unhappy about selling at a loss or for far less than they wanted to have sold but they realize that their profit margin isn’t the responsibility of the buyer.

Real estate is still only worth what a buyer is willing to pay and what a seller is willing to take. Real estate is a commodity that trades by way of supply and demand. Right now, there is just a larger supply in some areas than others and certainly less demand.

In some areas real estate isn’t much different than selling or trading stock. A “motivated” share holder wouldn’t call his stock broker and try to negotiate a sale of his portfolio back to summer of 2007 prices. Imagine the scenario: But my stock certificates are printed on better paper than everyone else’s, the corners aren’t tattered and there are absolutely no coffee cup rings on any of them, they’ve barely been used … that’s why they’re worth more than the other’s that they’re selling now.

Having the desire to sell and simply hoping or wanting to sell really badly isn’t going to make a buyer want to pay more than what anything is worth whether it’s shareholder’s stock certificates, an SUV or real estate.

Willing buyer on board, a motivated seller is someone that sells at the current value and has come to terms with the fact that they won’t be able to sell for the price they really wanted to, no matter how much that they wish they could.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the left pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or Naples Daily News it is probably stolen.

A Free Park to Hike in Estero, Florida

For some time I’ve been wanting to hike the Estero Bay Preserve.  It’s at the West end of Broadway (via US 41), about a half of a mile north of Corkscrew Road.  I finally made the trip.

See this creepy little dragon fly?  This is one of the many creatures, great and small, to be seen and experienced in the Estero Bay Preserve.  Just look at the notes others left behind regarding what they saw there.  Remember, to tell the truRth.  Hey, at least deAr was spelled correctly.

Sidebar:  Armadios sounds the same as armadillos en Espanol so you have got to love that misspell, instant classic.

  Wild Hogs, Raccoons, Armadillos ‘n’ Snakes

I’ve also driven past this sign and seen other things like skunks and stuff so user beware.  On this hike, I did see where the wild hogs had rooted up soil and dozens of footprint from them, raccoons and such.  The path will lead you right along side the Estero River, by the way. There were people in canoes and swimmers taking a dip.

Canoeing the Estero River

While I was taking this photo was right about the time that a swarm of bugs found us.  Besides the usual mosquitoes, there was horse flies, deer flies, someone said yellow flies, someone said cut flies.  I don’t know and I don’t care because it made us walk really fast, which combined with the heat made for a turn of events, the likes of which I’m just getting over.

We were walking through a wetland path with the cutest fiddler crabs scurrying every where.  I would have taken pictures for you but I was too busy swatting flies and trying to not catch West Nile or Meningitis.  *She who is slow or pauses for photos gets stung and bit a lot.*

It wasn’t long after hustling past the fiddler crabs that we decided to turn back because it was getting worse.  I really thought it was but I was trying not to be a big, huge baby, quitter.

There were a couple of times the trees got tippy on me and was a little disoriented. I ended coming through the gate at Armada Court, climbed the fence and, after helping a gopher tortoise get un-stuck from the fence, promptly left my delicious, Terri’s Summer Breeze Cafe breakfast on the side of the road, no where near this tortoise.  (It’s a $500 fine for messing with one of these suckers.  I bet barfing on/near one is a punishable offense.)

Do Not Molest a Gopher Tortoise - $500 Fine

If you’ve made it through this tale, this far, you should know that the rest of the day was filled with involuntary muscle cramping all over my body, a little more punies, dizziness, hallucinations and I was a little meaner than usual.

For the record, I had sunscreen on, frozen water and was hydrated, light colored clothes and I assumed that I was prepared.  Florida just kicked my butt on a random Sunday in the year of our Lord 2009.  I mention that because, again, I was laying in bed, sick as a dog, watching Clint Eastwood movies and now that saying is stuck in my head … again.

What I saw of this park was great and I can’t wait to complete the whole big trail, which was one of three at varying lengths from a short loop to about five miles – hikers choice.

In November I’ll be back, Estero Bay State Preserve.  Next time you’re not taking my hash browns.

The official site for Estero Bay Preserve is here:

Estero Bay State State Preserve

What good is a pre-qualification or pre-approval if you’re not going to listen?

When a buyer wants to buy a home, the Real estate agent they are dealing with usually asks right off the bat: “Have you been pre-qualified or pre-approved for a mortgage?”  Why is this such an important questions?  There are several things a real estate agent will know based on the provided answer and information to follow it.

Here is what the real estate agent finds out:

1. They have a legitimate buyer.
2. They know what price range to shop for.

Okay, now keep that second point in mind as we delve into the pre-qualification process.  And to explain this, I am going to use a recent buyer’s story.

The buyer came to us to be pre-qualified for the purchase of a new home.  Based on early findings, we were able to qualify this buyer for a mortgage of $x.xx and a monthly payment not to exceed $y.yy.  Now, the monthly payment took into consideration the basic PITI (Principle, Interest, Taxes, and Insurance) for a home of that value for which she qualified for.

When we notified the real estate agent for what the borrower qualified for, we also explained which programs the buyer was eligible for.  In this case, if the buyer wanted 100% financing through USDA, then the loan amount could not exceed $a.aa and a monthly payment of $b.bb.  If the buyer put 3% down, then HomePath financing was available at a mortgage amount of $x.xx and a payment of $y.yy.  Conventional and FHA financing were not optional.

Pretty straight forward, right?  Wrong.  The buyer is insisting on a home in a neighborhood where the HOA fees are over $200/month.  Yes, the home prices are in the range that the buyer is qualified for, but the monthly payment is well over $200 for what they are eligible to borrower.  Now with HomePath, we were able to get a FNMA DO/DU approval even with this $200 a month increase, but the home the buyer wants is not HomePath approved.

There are homes in that area, in that same neighborhood, in that same model, that are on HomePath, but someone did not show them to the buyer.  I am not going to speculate why they were not shown.  But I am going to ask, why did the real estate agent allow the buyer to enter into a contract, put earnest money down, when they have something in writing that states what the buyer qualifies for and that property does not meet that criteria?

Oh, wait… it does.  It meets the value of the house.  The real estate agent only listened to the buyer when they asked the question, “Have you already been pre-qualified for a mortgage?”  The answer was probably something like this, “Yes, I was pre-qualified for a purchase price of $x.xx.”  So, when the real estate agent got out letter, they just checked to make sure the purchase price was what they were told.  Monthly payments went right out the window.

Now, I am not pointing fingers as to who is to blame because it can go many directions.  But as a potential home owner, the buyer should have said right away when they learned of the $200+ per month HOA fees, that the house was now out of range.  However, when we got the approval from HomePath to continue with that price range with the HOA fees, the real estate agent should then have switched to HomePath homes for those homes with higher monthly payments.

In the end, a pre-qualification or even a pre-approval is only as good as the terms that are given in it.  Going outside those terms, means a big fat DENIED!!!  If one does not listen to the terms, then a lot of time is lost and possibly a lot of money.  Communication is key.  Fortunately, the Realtors and real estate agents that Knightlines regularly associates with, such as Chris Griffith of Bonita Springs, does listen to what the buyer is eligible for and works with the buyer to make sure that their pre-qualification/pre-approval turns into a “Congratulations on your new home!”

Jason Price

Owner/Principal Broker

(352) 308-7219 Phone

For some time now, Knightlines Mortgage Services has been offering the people of Florida a convenient way to finance and re-finance their residential property.

But that isn’t the entire story - we are also doing commercial lending in all 50 states.  AND - now we can offer commercial financing OUTSIDE of the country as well.  Caribbean, South America, etc - just call for the details.

Birds of Paradise at Bonita Golf & CC

Gulf Access Never Looked So Good

This boat was heading down the road and I just had to take a picture. I don’t know that I’ve ever seen four 225’s on a boat and thought, wow, this guy is a total bad ass.  Four engines on the back of a boat is like rolling on 22 inch rims with spinners!  That boat is fierce, the truck toting it is fierce.  It was a sweet set. 

Sometimes I’m just such a girl. A dorky girl that just doesn’t get it.  I mean, what man would own a boat like that?  Only, one: Uncle Sam.

Yeah, right about here is where I realized I was photo documenting a marine vessel owned by the US Department of Homeland Security and I was probably already in a database watch list.  Way to go, princess.  I guess you just may as well document the tow truck, too.

I’m just a quiet little real estate agent and I mean no harm to national security.  You see, I just got this new bad ass camera and I am having a hard time controlling myself.  So, if you could just look beyond this little incident I promise to not share the photos with anyone.  Oh, and is there any chance you’ll take me for a ride on that bad boy?

(Please don’t let them water board me.)

Up To $8,000 Up For Grabs

Since the first of the year, many first time home buyers have staked their claim in the Southwest Florida real estate market. Besides the low prices and historic low interest rates, the tax credit of up to $8,000 has been a huge motivator. There are still folks on the fence about when to buy this year and still be eligible to get the tax credit.

Basically, first time buyers have until November 30 to close on a home in order to be eligible for the credit unless it gets extended. It’s the middle of June which leaves about five months to get the job done so what’s the rush, right? From start through closing it’s really going to take more time than most people realize. If you cut it close to the wire, any unexpected delays could take you beyond the deadline and you’ll lose the credit. Counting on a credit that doesn’t come through because of delays would be harsh.

The loan approval process is going to require that a number of documents relating to employment and finances will need to be gathered and provided to your mortgage broker: Two years tax returns, pay check stubs, checks to prove rent payment history and usually 90 days of bank statements. Yes, you’ll feel hen pecked and probably have to explain something or other on your credit report that wasn’t pretty but just magically showed up.

The time you spend house hunting before you find a home is a huge variable. Many of the homes that are in the best condition with the best pricing go quickly, often with multiple offers. It may take you a few attempts at different homes before you successfully negotiate yourself into a contract.

Be prepare for the “hurry up and wait” home buying process. The bank involved properties that are on the market now continue to add different issues that pop up. Short sales haven’t gotten much faster even with all the years of practice the banks have had doing them. You could literally learn to play piano or speak Italian during the time it takes for most short sales get processed.

Further down the road, unexpected things can happen like defects found during the home inspection and discovery of major repairs or code violations that need fixed. Most of the issues are able to be worked through as long as there is enough time to do so.

There are all sorts of new rules regarding mortgages and appraisals. Regardless of how great real estate prices are these days, occasionally the home doesn’t appraise for the purchase price. It’s another hurdle that can be over come, but added time is needed, because it just takes longer to communicate with everyone involved due to the new rules.

Don’t take it down to the wire. Buying that first home doesn’t have to be stressful if you simply allow enough time to do it even if an unexpected wrinkle or two pops up. With any luck you’ll have smooth sailing and an easy transaction. If you don’t and have a little extra time on your side it will likely all work out with a tax credit as a housewarming gift.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

You can subscribe to a weekly email newsletter by visiting www.LifeInBonitaSprings.com and entering your email in the subscription area on the left pane of the web page or by adding us to your reader by subscribing to this blog. Oh, and if you’re reading this content anywhere else but www.LifeInBonitaSprings.com or Naples Daily News it is probably stolen.

If you don’t see the video above,click here.