My New Blog

Abusive and predatory lending practices are a serious problem for our nation's communities. Because of abuses in the sub prime market, families are losing their homes and savings, foreclosure rates are higher, and some neighborhoods face increased vacancy rates. Empty neighborhoods, or those where the majority of houses are for sale, can be perceived as blighted. This leads to declining prices and inevitably devastates the strength and stability of those communities and the families who live there.

How Did This Happen?

During the real estate boom, many lenders originated risky mortgages with floating interest rates and weak underwriting standards. While some in the media may have over-dramatized the situation, a number of sub prime lenders that made problematic loans have gone out of business, and the delinquency rate for sub prime loans at the end of 2006 was more than 13 percent--4.5 percent are in foreclosure.

Sub prime Lending Does Have a Legitimate Role for Many Borrowers While abusive lending does occur primarily in sub prime markets, not all sub prime loans are abusive or problematic. In fact, responsible sub prime lenders have played an important role in helping millions of consumers achieve homeownership.

Education is Key

The National Association of Realtors believe that financial education is an important defense against abusive lending practices and have issued a series of consumer education brochures. They emphasize the importance of understanding the different types of available mortgages, explain how to avoid pitfalls, and entrapments of predatory loans, and suggest what homeowners should do if they are concerned about their mortgage or foreclosure.

If you feel like you need immediate advice; call toll free 888-995-HOPE, or visit www.995hope.org.

Sandi Bates

Old Mill Realty

www.sandibates.com

801-367-7777

Before the Democrats' affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress "mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers.

Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains."

Under Clinton, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton's secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low- to moderate-income borrowers by the year 2001.

Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness.

Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke -- it's a fact.

When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.

In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded."

Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn't get out of their loans by selling their houses.

A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it's gone off.

In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government's "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system.

Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing." How dare you oppose suicidal loans to people who can't repay them!

The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.

Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats' two most important constituent groups: rich Wall Street bankers and welfare recipients.

Political correctness had already ruined education, sports, science and entertainment. But it took a Democratic president with a Democratic congress for political correctness to wreck the financial industry.

-Courtesy RIS Media-October 2008

Sandi Bates

Old Mill Realty

www.sandibates.com

801-367-7777

WHAT DO YOU THINK OF THE CURRENT ECONOMIC MELT DOWN? 

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Send you answers to scott@sclowardappraisal.com:

This is my family Blog.  This way you can get to know me and my family and the things wd love to do!

Thanks to my wife Miriam for putting this together!

Recently, HUD reported that over the last three months, the volume of FHA mortgage originations has doubled, going up to 181,900 applications.  Since FHA loans are becoming so popular, I am happy to let you know that I am FHA approved.  If you would like to order an FHA appraisal you will need my license number which is 5485415-CR00.  Also, just to let you know, HUD has recently changed and simplified their FHA appraiser guidelines whichs makes it great for all of us.

Thanks for choosing Scott Cloward as your appraiser!

Saturday, 24 May 2008

The Daily Herald posts another article that states "Existing home sales dip in April."

See this article at this link:

http://www.heraldextra.com/content/view/267584/

"Existing home sales fell for the eighth time in the past nine months, a sting of weakness expected to continue as the housing industry, mired in its worst slump in decades, battles falling home prices, tight lending conditions and a weak economy."

Home prices have continued to drop over the past six to nine months.  Many individuals are very frustrated at the lagging economy, rediculous gas prices, and stricted lending requirements.

Many point the finger at the appraiser, the realtor, or even the broker.  Why are any of us to blame for the current economic crisis?  Didn't the lenders make it easier to buy a home on "Stated Income" than it was to buy a "Screen T.V." on credit at your local electrinics store?

Now that the lenders are in such a crunch due to lost investments, what is the solution?  Lending guidelines need to soften up quite a bit.  People with above average credit and good loan to value ratios need to be able to find a loan program that will work for them.

As the appraiser, I am seeing it harder and harder to appraise homes in the area due to limited comparable sales.  The "lender" is wanting closer and more recent sales, as if we didn't include them in the original appraisal report in the first place. 

We all know that property values have dropped, but do you know how much?  My recomendation to you is to get an appraisal on your home NOW!  Don't you keep track of your stocks, roth or 401-K?  I am guessing that your home is one of your biggest assets.  Wouldn't you like to know what your home is worth in todays market?

Please feel free to contact me for an appraisal on your home, investment property, or vacant land.

May 28, 2008

In todays paper "The Daily Herald" there is an article stating that there is "52 Utah properties pu up for auction."  See attached link at http://www.heraldextra.com/content/view/267795/18/

Big changes are being addressed to the Appraisal / Mortgage industries.  Fannie Mae/Freddie Mac have agreed to adopt a Home Valuation Protection Code of Conduct which will establish requirements governing appraisal selection, solicitation, compensation, conflicts of interest, and corporate independence, among other things.  These changes are to be effective by January 1, 2009.

Under these new proposed changes:

    "No employee, director, officer, or agent of the lender, independent contractor, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development of and appraisal report."

    "Withholding payment is considered improper influence of an appraiser."

    "Requesting a pre-determined value is considered improper influence of and appraiser."

    "Providing to and appraiser a desired value for a subject property or a proposed or target amount to be loaned to the borrower is considered improper."

    "The lender or any third-party specifically authorized by the lender shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser."

    "The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third party (including mortgage brokers and real estate agents)."

    "Loan production staff of the lender are forbidden from participating in appraisal selection, review and management functions."

    "Lenders shall not utilize any appraisal report prepared by and appraiser employed by:

    - the lender,

    - an affiliate of the lender,

    - an entity that is owned by the lender,

    - an entity that owns the lender,

    - a real estate "settlement services" provider (as defined by RESPA), or

    - an entity that is owned, in whole or in part, by a "settlement services" provider."

    "The lender shall provide the borrower with a copy of the appraisal report immediately upon completion and no less than three days prior to the closing of the loan."

    "The lender will establish a telephone hotline and an e-mail address to receive any complaints from appraisers or other entities concerning the improper influence or attempted improper influence of appraisers."

    "The lender shall quality-control test, by use of additional appraisals, the appraisals or valuations that are used by the lender, including the results of automated valuation models, broker's price opinions or "desktop" evaluations."

For More Information

To download full copies of the agreement and the accompanying Code of Conduct, visit:

www.appraisalinstitute.org/cuomofannefreddie

These proposed changes could have a huge impact on appraisers.  Several appraisers are very concerned with the proposed changes.  These changes would not allow appraisers to be in contact with the loan officer, loan processor, or the mortgage company to discuss any issues regarding the valuation of the appraisal that is to be performed.  We all know that the Countries "Housing Crisis" needs serious help and changes.  Appraisers need to stick together and communicate with each other and not "back stab" each other.  We all know that there are appraisers out there that will "get value" or "push" appraisals.  If we stick together, these appraisers who "push" or "inflate" appraisal valuation, will eventually have their license revoked. 

The current market is changing throughout the country and the negative press is having a huge impact on the housing market.  There are few comparable sales to chose from and there are several houses on the market.  Utahs economy is still very good and unemployment for the state is still above the national average by 0.40 percent.  Interest rates are near all time lows which should help stimulate the housing market.  This is an election year and people are scared.  People are not spending money like they were last year at this time.  The Government has proposed a tax credit of $1,200 to families.  The Government believes that people will spend this money to help stimulate the overall market.  It is my belief that most people will not spend this money and they will save it for future "rainy days."

We are definitely in uncharted waters, but if we keep positive and make correct choices, we will get through this.  Patience and communication are the keys to relationships of any kind.

Utah is a great place to live and there are several major projects in the horizon.

I thank you all for your business and with a little patience and hope, these proposed changes to the lending industry will work out.

Scott Cloward

April 24, 2005

I wanted you all to know that Patrice got married on March 22, 2008 to Bernard Fano.  We want to wish you happiness and joy throught the rest of your lives together. 

We are so lucky to have Patrice here at Scott Cloward Appraisal Services and know we are happy that Bernard has joined our family.

Patrice has worked with me in the appraisal industry for nearly eight years and we consider her to be a great assest to our company.

Congratulation again to the newlyweds Mr. and Mrs. Fano!

We have had a great month here at Scott Cloward Appraisal Services.  We all want to thank you so much for your business.

Thanks again and again to all of you that make our job fun and successful.

Scott S. Cloward

Utah County, located along the base of the Wasatch Mountains, is situated near major transportation artery I-15.  At just 45 miles south of Salt Lake City, Provo City is the largest city in Utah County and the county seat.

2007 Population

Growth Rate: 5%

Provo City = 113,984 Population

Orem City = 90,857 Population

Utah County = 501,447 Population

State of Utah = 2,699,554 Population

Source: Utah Population Estimates Committee

Major Recent Announcements:

Micron and Itel have signed a $500 million agreement to develop and manufacture NAND-style flash memory for Apple's iPod line at a facility located in Lehi city.  The merged company, named IM Flash, opened in 2007 with high quality, high paying jobs.

The small town of Vineyard, Located between Utah Lake and Orem, will soon be booming with new growth.  With the recent sale of the Geneva Steel property, two planned housing developments and spacious, lakefront property will create residential growth.

Education Highlights:

Brigham Young University (BYU) attracts nearly 30,000 students from 112 countries and has gained recognition for its excellent undergraduate and graduate programs.

Utah Valley University (UVU) in Orem has seen high growth in past years.  UVU offers many certifications, Associate's degrees and Bachelor's degrees.

Source:  Economic Development Corporation of Utah-Utah County Profile