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Further
Reading ...
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Is a Small Business Web Site a Wise Investment? - Ron Scott
One of the greatest pitfalls in e-commerce is Field of Dreams thinking, the notion that all one has to do is “build it (a web site) and they will come.” “I can’t think of anything further from the truth,” Ron Scott, a Riverside, California web...
Finding A Capable Agent To Meet Your Real Estate Needs - W Troy Swezey
Whether you’re a first-time buyer, selling your current home or relocating to a different part of the country, the support of a qualified, knowledgeable real estate agent can alleviate many of your concerns and ensure a smooth transaction. A...
Small Business Q & A: The Secrets Of Starting A Successful Ebay Business - Tim Knox
Q: I hear so much about people who started selling on eBay and eventually turned it into their full time business. Is it really possible to build a profitable business just selling junk on eBay? -- Alex K. A: If Fred Sanford were alive today,...
Escaping The Matrix - The WezeeMall Know It All
One of my mottos has always been "work smarter,not harder". I guess that's why I never could hold a traditional/regular job down because that WAS definitely harder. I gave away my precious time and energy to earning huge dollars someone else...
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Home Equity Loans – Beware of Appraisal Fraud
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Written By:
Charles Essmeier
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A new report by the independent Demos group has revealed what may not be a surprise to many people – corruption is rampant in the home appraisal industry. The bust in the dot-com market of some five years ago has left would-be lenders with a surplus of cash to lend. This has led to a huge boom in both mortgage and home equity loan lending. That’s not a bad thing; a record 69% of Americans now own their own homes. Owning a home is easier than ever; in 2004 the average down payment was a record low of only three percent.
So if everyone is buying a home, and loans are easier to obtain than ever, what is the problem? The problem is that nearly 55% of the appraisers polled in the survey said that they had been pressured by lenders to deliver appraisals that met a “target” value. The appraisers said that failure to meet the “target” value resulted in either their not being paid, or not being hired again. Since most appraisers want to keep working, they have had a tendency to meet the target value, even if it means that they have overestimated the value of the property. This drives prices artificially higher and leaves many homeowners with mortgages that may be worth more than the homes they were meant to finance. This problem becomes acute should the owner need to sell the home, only to discover that it isn’t worth as much as he or she owes on it.
The worst-case scenario to result from this would be a burst in the current real estate “bubble” and a nationwide collapse in home values, leading to massive foreclosures. This probably will not happen, but there are several things prospective borrowers can do to avoid being caught in the appraisal - continued below ...
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continued ...
trap:
*Become educated about the appraisal and lending process. The more informed you are, the less likely you are to be caught in a scam.
*Be aware that refinancing your home isn’t a cure to all problems. It may seem appealing to use the equity in your home for such uses as debt consolidation but if the result of that is that you owe more on your home than it is worth, you probably haven’t gained anything.
*Be active in the appraisal process. Talk to the appraiser, and ask to see the finished appraisal, along with the data used to create it. Appraisals are based in part on the sales of similar properties in your area. Check them out yourself and compare the home you saw with the stated appraisal value.
*Be bold. Ask your lender if they pressure their appraisers to provide inflated values. You might not get an honest answer, but pay attention to how they respond. You might be able to determine if they are lying.
Ultimately, if you take out a home equity loan or a mortgage for more than your home is worth, you are the one that suffers. That can be easily avoided if you simply pay more attention to the process and educate yourself about the possible pitfalls. The last thing you want to lose is your home.
About the Author
©Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com/ and http://www.HomeEquityHelp.net/
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| _Additional Resources ... |
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Work At Home, Go Bankrupt At Home--It's Your Choice - Isaiah Hull
If you want to make an income working at home, you must mitigate spending in the early phases of your venture. If you spend wildly, you will never make money. I can promise you this now. It happens to almost every person who tries to work at home;...
The Cost of Green Eggs and Ham - A Raymond Randall Jr
Young readers know that March 4th is the birthday of Dr. Seuss. Many parents trip their tongues over Seuss stories like "Green Eggs and Ham". "Do you like green eggs and ham?/I do not like them, Sam-I-am./I do not like green eggs and ham". ...
Internet is my true agent - Dessislava Oundjian
You know the type -- that doodling type. Every time there is a pen and paper on the table, they will be sketching something down, with a mysterious smile, giggling quietly and making funny faces. Vlad Kolarov is no exception -- however, he has...
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