Mortgage Rate News

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A controversy is brewing over the recent rule changes to the way appraisers are paid, and how they do their jobs. In order to help beat back mortgage fraud, appraisers could no longer be paid by the mortgage lenders and brokers that were trying to get approvals for loans. While forcing independence on appraisers could curtail mortgage fraud and control ballooning home prices in the future, there are also some consequences that have not been foreseen. For those looking to sell a home or refinance, it is often surprising to find out that home values are dropping.

ajc.com offers a look at how things are playing out in some areas, thanks to the new appraisal rules:

The code was intended to make home appraisals more reliable by making appraisers independent of mortgage brokers and real estate agents. Banks and appraisal management companies now assign jobs and forward fees to the appraisers, rather than the people who earn commissions on home or loan sales.

The aim: to reduce the pressure on appraisers to produce the sort of inflated home values that helped justify ever-bigger home prices and mortgage loans in once white-hot markets like metro Atlanta.

Instead, say critics like Alexander, who is president of the Georgia Association of Mortgage Brokers, the change has resulted in many faulty value estimates. Appraisers, who are generally earning lower fees in the new system, are often rushing through assignments and sometimes traveling far from their local territories to do valuations.

Unfortunately, lower fees mean that in some cases appraisers are not interested in doing thorough work. Another problem is that of appraisers from different areas. One way that you can get a closer appraisal to the going market value is to make sure that your appraiser is familiar with your real estate market, and that he or she will understand the nuances of the neighborhood and choose truly comparable homes to base the appraisal on.

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Every year, bloggers around the world unite with a single purpose, in an effort to raise awareness of an issue. The year, Blog Action Day is focusing on global climate change. When one things of climate change, one must also think about energy consumption. How we use our energy affects our world. Whether or not it is something that makes a huge difference in our weather patterns is up for debate in some circles. However, no matter how you feel about climate change, the way we use energy does have a very real effect on pollution, which should be a public health concern.

You can fight global climate change and pollution by making some changes to your home green home improvements can help you increase your energy efficiency, reduce your power bill and even get you a tax credit. The government is willing to provide you a tax credit when you make the following green home improvements:

• Windows
• Doors
• Roofing
• Insulation
• Water heaters
• Solar panels
• Fuel cells
• Wind energy systems
• Geothermal heat pumps
• Biomass stoves

You should be aware that the tax credits offered expire at different times, for different improvements, and that there are limitations on some of the green home improvements that you make. You can use a home equity loan or a line of credit to make the improvements and get a tax break on the interest you pay as well. Just make sure that you understand the cost, and that it might take several years for the green home improvements that you make to actually pay for themselves.

In some places, you can get state and local tax credits in addition to federal tax credits. Some banks and credit unions will also offer you a lower interest rate on a home equity loan if you are using it to make green home improvements. Before you begin, make sure you have looked into all available programs, and that you are getting the maximum help you can.

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Even though there are signs that the housing market is stabilizing, there are still a great many people in danger of foreclosure. If you are trying to figure out how you can stave off foreclosure, you might consider loan modification. Under the Making Home Affordable plan, there are provisions for those who are interested in saving their homes through loan modification so that they can afford their mortgage payments. Here are some of the requirements to qualify for a loan modification under making home affordable:

1. Housing costs must exceed 31% of your income. This is your income before payroll deductions. Housing costs include mortgage payment, homeowners insurance, property taxes, condo fees and other similar costs.
2. 3 month trial period. The new payment, which is adjusted — using interest rate deductions or loan term extension — so that it is 31% of your income or less, gets a trial run. If you make the new payment on time, then the payment is locked in for five years. Mortgage lenders can’t raise the rate any more than 1% per year. The rate caps out at the prevailing market rate at the time of the loan modification.
3. Unpaid principal less than $729,750.

Loan modification can be a great tool for those who are experiencing temporary difficulties, but are trying to get things back in train. It is important to realize, though, that loan modification will do little for those who couldn’t really afford their homes in the first place. Once the five years is over, home owners may find themselves in the same place. Loan modification works best for those who could afford their homes originally, but fell into difficulty due to the economic climate.

In the end, you will have to prove that you can make the new modified payments. In some cases it just won’t work. But for those who can use a loan modification to ride out the economic troubles and get back on their feet, this may be just what is needed.