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Old 11-19-2009, 08:07 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,224,524 times
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I ran across this last night surfing the news:

http://www.cnbc.com/id/33962953?slide=3

Pretty shocking statistics. They cite 48.2% of homeowners in the Sarasota, Bradenton, Venice area have negative equity.

U.S. Cities With The Most Underwater Mortgages - Slideshows - CNBC.com
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Old 11-19-2009, 08:42 AM
 
Location: Ohio/Sarasota
913 posts, read 2,363,643 times
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Quote:
Originally Posted by Dreamy46 View Post
I ran across this last night surfing the news:

U.S. Cities With The Most Underwater Mortgages - Slideshows - CNBC.com

Pretty shocking statistics. They cite 48.2% of homeowners in the Sarasota, Bradenton, Venice area have negative equity.

U.S. Cities With The Most Underwater Mortgages - Slideshows - CNBC.com
Interesting. It could be worse, as I have found the values on Zillow to be 10-15% higher than what a property actually sells for.
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Old 11-19-2009, 08:49 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,224,524 times
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Quote:
Originally Posted by davery5872 View Post
Interesting. It could be worse, as I have found the values on Zillow to be 10-15% higher than what a property actually sells for.
After reading this the other day, it appears sales prices are rather dubious, and the same cast of characters has been busy...

The new flipping: short sales | HeraldTribune.com | Sarasota Florida | Southwest Florida's Information Leader

And those kinds of statistics show the foreclosures aren't drying up anytime soon.
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Old 11-19-2009, 10:05 AM
 
166 posts, read 604,553 times
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I don't really get what numbers they are using to make a claim that 48.2% of homes are underwater. The Bradenton-Sarasota-Venice MSA is the area they are using which is Sarasota and Manatee Counties. There are 221,000 housing units in Sarasota County alone. Manatee county has about 170k. (census data 2008)

I don't get how 73k homes would be 48% of all homes in the area. I suppose if they drop multifamily homes its going to make up a little bit of that, but it still doesn't make sense. Am I missing something?
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Old 11-19-2009, 10:21 AM
 
Location: Sarasota FL
6,864 posts, read 12,089,946 times
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We have been hearing a whole lot of made up numbers in many different venues and categories. Banks, mortgage companies, real estate companies have units that do nothing except try to come up with the value of a home. And they still get it wrong. Yet so many people believe and put faith in a dollar amount that a web site places on a home.
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Old 11-19-2009, 10:33 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,224,524 times
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Quote:
Originally Posted by d4g4m View Post
We have been hearing a whole lot of made up numbers in many different venues and categories. Banks, mortgage companies, real estate companies have units that do nothing except try to come up with the value of a home. And they still get it wrong. Yet so many people believe and put faith in a dollar amount that a web site places on a home.
Banks don't come up with the values for homes on their own, they use local real estate agents.

If you quit paying your house payment the bank will send a real estate agent to do a BPO (Broker Price Opinion) to get an idea what the numbers are going to be if the house goes into foreclosure. If you buy a house, the bank sends an appraiser to see how much they can safely lend. So who's responsible if you feel there are bad numbers? Websites? Banks? Or...
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Old 11-19-2009, 05:27 PM
 
Location: Palm Island and North Port
7,511 posts, read 22,937,772 times
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Quote:
Originally Posted by Dreamy46 View Post
Banks don't come up with the values for homes on their own, they use local real estate agents.

If you quit paying your house payment the bank will send a real estate agent to do a BPO (Broker Price Opinion) to get an idea what the numbers are going to be if the house goes into foreclosure. If you buy a house, the bank sends an appraiser to see how much they can safely lend. So who's responsible if you feel there are bad numbers? Websites? Banks? Or...
That's correct Dreamy. And when we do a BPO we use actual data from the MLS or the property appraisers website. We have certain guidelines when preforming BPO's for a bank. So, it's not just hocus pocus like some other websites publish.

I can tell you the appraisers are being very cautious on their appraisals and the banks and really going over them with a fine tooth comb as they are with our BPO's that we turn in. And they get several BPO's on one property one from the list agent, one from an agent independent of the sale and in some cases another BPO independent of the sale. They look at all three BPO's and if ours is out of line from the other reports we better be ready to explain why. None of the agents doing the BPO's knows who the other agents are conducting the other BPO's.
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Old 11-19-2009, 06:41 PM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,224,524 times
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Quote:
Originally Posted by SoFLGal View Post
That's correct Dreamy. And when we do a BPO we use actual data from the MLS or the property appraisers website. We have certain guidelines when preforming BPO's for a bank. So, it's not just hocus pocus like some other websites publish.

I can tell you the appraisers are being very cautious on their appraisals and the banks and really going over them with a fine tooth comb as they are with our BPO's that we turn in. And they get several BPO's on one property one from the list agent, one from an agent independent of the sale and in some cases another BPO independent of the sale. They look at all three BPO's and if ours is out of line from the other reports we better be ready to explain why. None of the agents doing the BPO's knows who the other agents are conducting the other BPO's.
It's nice to hear that is how it is done at least some of the time.

Here's the quote from the flipping article:

Quote:
"The Realtors hired to estimate a property's value sometimes end up as the listing agent on the house, said Chrissi Rhea, a Tennessee mortgage banker and outspoken critic of short sale flips."

"Rhea, president of Mortgage Investors Group, said she has discovered about 15 short sales where banks accepted one sale price and the house was immediately flipped for at least $20,000 more."

"In almost every case, the Realtor who performed the BPO for the bank became the listing agent, she said."

"Such agents are in a unique position to artificially deflate what the bank gets paid, Rhea said."

"On behalf of a friend, business partner or straw buyer, the agent starts by reporting a low value to the bank, allowing the related party to buy the property for less than the fair-market value. While the bank considers the offer, the agent can put the property "on ice, " ignoring higher bids or turning away potential buyers."
No way they could do this with multiple people running checks, so still plenty of cases where nobody is looking apparently - other than the local news reporters.
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Old 11-20-2009, 05:23 AM
 
Location: Palm Island and North Port
7,511 posts, read 22,937,772 times
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Quote:
Originally Posted by Dreamy46 View Post
It's nice to hear that is how it is done at least some of the time.

Here's the quote from the flipping article:



No way they could do this with multiple people running checks, so still plenty of cases where nobody is looking apparently - other than the local news reporters.
Good quote and interesting article. I have been the listing broker on many of my BPO's and I do know that in every case they have checked my work. I always get a call from the bank asking me why I used a certain home or why I made a certain comment on the BPO or how I came to a cost for the repair work needed, etc. In many cases they will reference some other BPO that they have gotten in. We also get the question quite often, "does the bank know what kind of work needs to be done" or "has the bank seen this?" The answer is yes, we have to send multiple pictures of any damage, get estimates, send at least four photos of every room, pictures of all the mechanicals, front, back, side pictures, street view, etc. So yes the bank is fully aware of how the home looks and any issues that are readily apparent.

Once the bank gets our report in they compare it with the others and come up with a reasonable price. They also require unemployment stats, supply and demand stats, days on market, the most similar 3 active properties and sold properties and a ton of other things. I would say they have a pretty good picture of what an accurate price might be. If you don't give the banks accurate values then you won't be listing for very long. Fannie and Freddie have even more requirements. Such as, the home has to be listed in the MLS for at least 15 days before they will consider any offer. Also no investor bids within the first 17 days. We have to send them a copy of the actual MLS listing sheet. This would prevent any "selling to friends or relatives".
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Old 11-20-2009, 08:27 AM
 
Location: Bernanke's Financial Laboratory
513 posts, read 1,224,524 times
Reputation: 225
Quote:
Originally Posted by SoFLGal View Post
Good quote and interesting article. I have been the listing broker on many of my BPO's and I do know that in every case they have checked my work. I always get a call from the bank asking me why I used a certain home or why I made a certain comment on the BPO or how I came to a cost for the repair work needed, etc. In many cases they will reference some other BPO that they have gotten in. We also get the question quite often, "does the bank know what kind of work needs to be done" or "has the bank seen this?" The answer is yes, we have to send multiple pictures of any damage, get estimates, send at least four photos of every room, pictures of all the mechanicals, front, back, side pictures, street view, etc. So yes the bank is fully aware of how the home looks and any issues that are readily apparent.

Once the bank gets our report in they compare it with the others and come up with a reasonable price. They also require unemployment stats, supply and demand stats, days on market, the most similar 3 active properties and sold properties and a ton of other things. I would say they have a pretty good picture of what an accurate price might be. If you don't give the banks accurate values then you won't be listing for very long. Fannie and Freddie have even more requirements. Such as, the home has to be listed in the MLS for at least 15 days before they will consider any offer. Also no investor bids within the first 17 days. We have to send them a copy of the actual MLS listing sheet. This would prevent any "selling to friends or relatives".
Unless someone had intricate knowledge of who friends and family are, short of blatant same last name situations, it would be impossible to screen for that.

How do the banks handle Chinese Drywall homes?
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