Latest Articles by cwleeper

PMI (private mortgage insurance) removal, easier than you think.

Tue, 17 Apr 2007 00:00:00 -0500

PMI Insurance (private mortgage insurance) is a cost added to the monthly payment of many conventional mortgage loans. Mortgage insurance helps protect lenders against the costs of foreclosure. Mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the event of foreclosure.

The Homeowners Protection Act of 1998 establishes rules for automatic termination and borrower cancellation of PMI on home mortgages. These protections apply to certain home mortgages signed on or after July 29, 1999 for the purchase, initial construction, or refinance of a single-family home. These protections do not apply to government insured FHA or VA loans.

For home mortgages signed on or after July 29, 1999, your PMI must - with certain exceptions - be terminated automatically when you reach 22 percent equity in your home based on the original property value, if your mortgage payments are current. Your PMI also can be canceled, when you request - with certain exceptions - when you reach 20 percent equity in your home based on the original property value, if your mortgage payments are current.

One exception is if your loan is "high-risk." Another is if you have not been current on your payments within the year prior to the time for termination or cancellation. A third is if you have other liens on your property. For these loans, your PMI may continue. Ask your lender for more information about these requirements.

Did you know, even if you have not paid down your mortgage to 78% of your original purchase price, you can still ask the lender to remove this PMI and the payment they charge you monthly? Many lenders will remove your PMI when the value of your home has increased, your equity is above 20% and you have two years of a good payment history. You will have to provide the lender with an appraisal to verify that your equity is above 20%.

Do this to get rid of your PMI…

1. Contact your lender.
a. Ask them to send you the procedures and requirements to remove your PMI insurance.

2. Order a real estate appraisal.
a. If you feel you qualify for your lenders requirements, then order a real estate appraisal from a licensed or certified appraiser.

3. Submit a request to remove PMI.
a. Providing you meet all the lenders requirements.
b. Providing the appraised value indicates you have 20% or more equity (appraised value minus loan balance equals equity)

…Then start saving money!

Go here for more PMI information: Homeowners Protection Act of 1998

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Chas W. Leeper, SRA has been a real estate broker for over 30 years; a certified and designated real estate appraiser for over 20 years; an author, sportsman and grandparent. He is currently the CEO of Southern California Real Estate and Appraisal Inc. More information about Mr. Leeper can be found under “principal appraiser”

Source: http://www.articletrader.com

The many definitions of "A Good Appraiser"

Tue, 03 Apr 2007 00:00:00 -0500

I have heard it said, "A good appraiser is hard to find". It really depends on what definition you use. I have been around long enough to know there are a few definitions of a "good appraiser".

The real estate appraiser's definition of "a good appraiser
": A good appraiser is one who has been well trained through education, experience and mentoring. Understands if the value is off, someone relying on his report might get burned. The appraiser has good and extensive data sources and knows his service area well. He has a good idea of the ebb and flow of buyers and sellers in the market place, both from his data and from his experience with the market area. When including comparing sales in his report, he strives to use the most recent sales which are most comparable to the subject property. Physical and locational differences are adjusted based on what the market indicates. The good appraiser also considers comparable listings and/or pendings as (after market based adjustments) they tend to set the upper limits of value. The good appraiser reconciles all of his research, analysis and reasonings into a final value estimate that is not influenced by biased individuals connected with the transaction.
From over 20 years of appraising, the following is what I have come to understand the definition of a good appraiser is, from the view point of …

A few Divorcing spouses: A good appraiser is one who brings the value in LOW because I want to buy my EX out of the house.

A few Divorcing spouses: A good appraiser is one who brings the value in HIGH because I want my EX to buy me out of the house.

A few Commissioned loan agents: A good appraiser is one who will, look at comps and tell me what the value will be before doing the appraisal; use whatever comparable sales will indicate a high value (even if they are not the most comparable); withhold information about the property or location (which might put off the underwriter/lender); will change the report when the truth about the property does not match up with the underwriter/lenders guidelines or requirements; will bring the value in for what ever will make the loan work. (Disclaimer: the majority of commissioned loan agents I work with are very professional and do not use the above tactics)

All Lenders (the one with the money): A good appraiser will be unbiased in his appraisal and communicate true market value.

It is kind of funny that the definition of "a good appraiser" can be so varied. In the face of being labeled "a bad appraiser" by those who use another definition, the good appraiser will always stick to his definition, no matter the cost.

P.S. for a funny look at this topic, check out:
Real Estate, in the eye of the beholder

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Check out how a "good appraiser" can help

remove pmi insurance

Source: http://www.articletrader.com

Maximum Value Comp Check?

Wed, 28 Mar 2007 00:00:00 -0500

Recently, I had one of our clients request a "maximum value comp check" to help him determine if he would be able to make a loan to his customer. I understand that the loan agent cannot make the loan if there is not enough equity in the house, so both the agent and the borrower want "maximum value".

This is a very common request from loan agents and we do provide comparable sales information but they aren't always what the loan agent had in mind. Regarding "comp checks", USPAP and logic set boundaries that the professional appraiser must stay within. I hope understanding these boundaries will help mortgage professionals better work with their appraiser.

"The appraiser cannot make a value judgment without going through the appraisal process.

"USPAP prohibits the appraiser from making a value judgment before completing the appraisal process. Appraisers who tell you if your estimated value will work or not" are unethical and are at risk of losing their license.

" Logic prohibits anyone from making an accurate value judgment before obtaining all the facts. I.E. market conditions, location, condition, size, detriments, and the list goes on and on. How would you feel about your doctor if he told you, you needed an operation based on a phone conversation? Looking at a list of comparable sales and stating a value estimate sets the appraiser and the lender up for problems.

" The appraiser cannot take an assignment based on a "predetermined value".

" AO-19 from USPAP states "If an appraiser is asked whether a specific property has a value (a point, a range, or a relationship to some benchmark), that request is for an opinion of value (an appraisal). Appraisers, obligated to comply with USPAP, must develop a real property appraisal in accordance with STANDARD 1. Communicating that value opinion must be accomplished in accordance with STANDARD 2."

We send comps as an accommodation and are happy to do it as a service to our clients. However, we cannot make value judgments without doing an appraisal. We generally recommend doing an appraisal if there are comps that bracket the estimated value. We also suggest the borrower check the comps and decide if an appraisal is warranted.

Leeper Appraisal Services work with many loan agents and brokers on a daily
basis. We offer free "comp checks" to give our clients more information to
help them in their loan process.

…But please, do not ask us for a "maximum value comp check

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Chas W. Leeper, SRA has been a real estate broker for over
30 years; a certified and designated real estate appraiser for over 20 years; an
author, sportsman and grandparent. He is currently the CEO of Southern
California Real Estate and Appraisal Inc. More information about Mr. Leeper can
be found at :

http://www.leeperappraisal.com/principalappraiser.htm

Source: http://www.articletrader.com