An appraisal of real estate is the valuation of the rights of ownership. Instead of just creating the property value, the appraiser uses market data to derive a value estimate.   The appraiser must take the site, amenities and the physical condition of the property into consideration when compiling the report.  Before the appraiser can come to a final opinion of value, there must be a good deal of data conducted and collected.  He will inspect the property as part of preparing the report.   The need to accurately define the purpose of the appraisal is essential due to the many types of value, such as Fair Market Value, Insurance Value, Tax Value and Value In Use. Mortgage companies request the majority of real estate appraisals to confirm the property's purchase price for loan purposes... 09/12/2008

A credit default swap (CDS) is a credit derivative contract between two counterparties, whereby the "buyer" or "fixed rate payer" pays periodic payments to the "seller" or "floating rate payer" in exchange for the right to a payoff if there is a default or "credit event" in respect of a third party or "reference entity". If a credit event occurs, the typical contract either settles by delivery by the buyer to the seller of a (usually defaulted) debt obligation of the reference entity against a payment by the seller of the par value ("physical settlement") or the seller pays the buyer the difference between the par value and the market price of a specified debt obligation, typically determined in an auction ("cash settlement"). A credit default swap resembles an insurance policy, as it c... 09/11/2008

I have been informed by a friend who is also a gas station owner that the price of gasoline will be rising significantly tomorrow here on the gulf coast and over the next few days over the southeast and the rest of the nation. This is said to be due to the probability of a refining shutdown in Louisiana and Texas. Take it for what it's worth... 09/11/2008

First, the Washington Post, New York Times, and Wall Street Journal all report that the Fed and Treasury are brokering a deal, but are trying to avoid the use of public funds. From the WSJ: Lehman Brothers in Sales Talks; B of A Seen As a Potential Suitor Lehman Brothers Holdings Inc. is actively shopping itself to potential suitors, including Bank of America Corp., people familiar with the matter said Thursday. ... But potential buyers remain wary about plugging holes in Lehman's balance sheet, and are increasingly looking to the U.S. government to help backstop. When will this end? 09/11/2008

As a resident of the Gulf Coast of Alabama, I would like to extend a prayer to our neighbors in Texas as Hurricane Ike approaches. I have been though several hurricanes in my life, from Frederic in '79 all the way through Ivan and Katrina over the last couple of years. Please stay safe... 09/11/2008

Members of the U.S. Senate Banking Committee have asked Fannie and Freddie to freeze foreclosures for loans in their portfolio's for  90 days. ``This action would provide immediate relief to many homeowners'' and let the companies ``turn these non-performing loans into performing assets to minimize losses,'' Senators Charles Schumer, Robert Menendez and other panel Democrats said today in a letter to the companies and the Federal Housing Finance Agency, which is overseeing them under the government conservatorship. The companies also should ease their policies on modifying mortgages, the senators wrote. 09/11/2008

An owner's title insurance policy protects the owner against title defects in the property.  A mortgage title policy protects the holder of the mortgage on the property. Separate policies are required to protect both interests. After the buyer's deed is delivered and recorded, the owner's policy of title insurance is issued. Typically, a purchaser's policy is issued after both parties have executed the contract  and the title agent has recorded the deeds. The coverage of your policy applies only to matters that appeared of record up to the date of issuance of your policy. Some documents may have been recorded since that time; some of these may affect the title to your land. There may be accrued and unpaid taxes and assessments along with possible court actions affecting your title. The ... 09/11/2008

The source of funds for your down payment and closing costs is a high level concern for lenders when they review your loan package for approval.   Most likely, you will be asked to provide statements for the last two or three months on any of your liquid assets. This includes checking accounts, savings accounts, money market funds, certificates of deposit, stock statements, mutual funds, and even your company 401K and retirement accounts. If you have been moving money between accounts during that time, there may be large deposits and withdrawals in some of them.  The mortgage underwriter (the person who actually approves your loan) will probably require a complete paper trail of all the withdrawals and deposits. Although potentially quite tedious, you may be required to produce cancelle... 09/11/2008

Your lender will provide a Good Faith Estimate of Closing Costs which include but are not limited to: Down payment The loan origination fee The mortgage loan processing fee The mortgage loan underwriting fee Appraisal fee Credit report fee Flood certification The homeowner's insurance premium for the first year Escrow account reserves for insurance and property taxes, if applicable Survey fee Attorney fees Title search fee Title insurance premium Title company fees Courier fee Deed recording fee HOA transfer fee if applicable   09/11/2008

When you insure your home, you should insure your home for the total amount it would cost to rebuild your home if it were destroyed. If you don't have sufficient insurance, your insurance company may only pay a portion of the cost of replacing or repairing damaged items. There are three ways to insure the structure of your home: Replacement Cost: Insurance that pays the policyholder the cost of replacing the damaged property without deduction for depreciation, but limited to a maximum dollar amount. Guaranteed Replacement Cost: Insurance that pays the full cost of replacing damaged property, without a deduction for depreciation and without a dollar limit. This coverage is not available in all states and some companies limit the coverage to 120 percent of the cost of rebuilding your home... 09/11/2008

Washingtom Mutuals stock is in a freefall and we could see a run on the bank soon, similar to what happened with InyMac. This bank should be monitored closely today. They are knee-deep in Pay-Option ARMS, mostly in California. From the MarketTicker: Those of you who have read The Ticker for a while know that I have been banging on the drum of WaMu for a long time - since last April when I first piled onto them following their 1Q 07 report in which I "noticed" that they were paying dividends out of (in part) Capitalized Interest - which, while "booked" profit, isn't cash. As I always said in my years in business, its first, foremost, and always the cashflow stupid; all else is a nice distraction. Now swaps on WaMu (protecting against the risk of default) are being quoted not in basis poi... 09/11/2008

1. What is Prequalification? Prequalification is the process of determining what price a home can be purchased by a prospective buyer. 2. My real estate agent recommended that I get a commitment letter. What is a commitment letter, and why should I get one? A commitment letter is given by the lender stating the terms which it agrees to provide a mortgage to a homebuyer. Commitment letters help you set realistic goals while you're house-hunting, provide the same negotiating ability as a cash buyer, and enable you to move quickly once the perfect home is found.3. When mortgage lenders refer to "PITI" what exactly are they referring to? PITI is Principal, Interest, Taxes, and Insurance- the components of a monthly mortgage payment.4. When my loan officer asks me if I want to waive my escro... 09/11/2008

In their recent conference call, BOA warned that their commercial portfolio is under-performing. Many fin ancial analysts think this may be the next shoe to drop. These loans are mostly construction loans to builders... Sept. 10 (Bloomberg) -- Bank of America Corp., the biggest U.S. consumer bank, said credit weakness is spreading to commercial borrowers from residential customers and loan losses probably will deepen in the third quarter. Home builders unable to repay their loans are contributing to deterioration among commercial borrowers, said Brian Moynihan, head of the global corporate and investment banking unit, at a New York conference today. More than half the Charlotte, North Carolina-based bank's $13.4 billion in loans to builders are considered troubled, 19 percent are not pa... 09/10/2008

Chairman of the House Financial Services Committee, Barney Frank, has discussed publicly the fact that he has negotiated an agreement with HUD Secretary Steve Preston that will provide for the continuation of privately funded downpayment assistance. The agreement allows HUD to impose risk-based pricing on downpayment assistance transactions which provides Secretary Preston the fiscal protection he seeks for the FHA insurance fund. According to an Inman News article published today, Chairman Frank is quoted as saying "The FHA loved the ban on down-payment assistance (but) hated the ban on risk-based pricing," Frank said at Saturday's hearing. "That seemed to me to offer an opportunity. So (HR 6694) will replace both bans with middle ground -- and it will pass the House, I can guarantee y... 09/10/2008

As the market rallied on Monday with the news of the Fannie and Freddie rescue, it weakened yesterday on news the Lehman still hasn't secured a new capital infusion... From the New York Times: On Wall Street, there is a growing sense that Lehman may have to solve its problems on its own, without drastic help from the government, which in March brokered the rescue of another Wall Street bank, Bear Stearns."Some may worry that Treasury has taken on so much taxpayer burden they don't have any remaining capacity more to take on the burdens of Lehman," said David Trone, an analyst at Fox-Pitt Kelton. 09/09/2008

The mortgage market continues to tighten, with more non-traditional mortgage products starting to exit the market. Today, CitiMortgage announced the end of it's stated income (SIVA and SISA) and 40-year loan products, the 40-year interest only mortgage and the 40-year ARM. These products have no buyers in todays market and this tightening mwill continue for a while. From CitiMortgage: For all Agency Alt-A (SIVA and SISA), 40-year Fixed I/O, 40-year LIBOR ARM products - these are being discontinued. Any loans that you have under these programs must be REGISTERED BY 9-12-08, LOCKED BY 9-30-08, and FUNDED BY 10-31-08. 09/09/2008

View Real Estate For Sale in Mobile, Alabama Following is a list of Neighborhoods/Subdivisions in Mobile, AL. We offer FREE no obligation information on any Subdivision in Mobile including recent home sale statistics, average selling price, schools, parks, community information and home values. If you are looking to purchase Mobile Foreclosure home, REO/Bank owned real estate in Mobile and Mobile distressed properties, We are here to assist you. Contact us today to learn more about Subdivision(s) of your choice in Mobile, AL. Adobe Ridge Estates Airmont Airport Acres Airway Commercial Park Alandale Alba Beach Albert Street Alexander Heights Alpine Hills Alpine Hills-concord Alpine Park Alta Vista Amberly Amelia Court Angelo Place Annwood Antoine Apartment Site Arlington Arlington Oaks ... 09/09/2008

One of the upsides to the government bailing out Fannie/Freddie will be lower rates for the fixed-rate mortgages. As the government buys mortgage backed securities, the yield will drop and thus rates will drop. Treasuries will suffer as the money pours into MBS. This is being reflected this morning and rates should drop dramatically.... From marketwatch... Washington takes over Fannie Mae, Freddie Mac Stock markets rally on U.S. Treasury move By Greg Robb & Steve Gelsi, MarketWatch Last Update: 8:23 AM ET 9/8/08 WASHINGTON (MarketWatch) - U.S. Treasury Secretary Hank Paulson on Monday said the government's takeover of Fannie Mae and Freddie Mac was necessary, but it was "not something I wanted to do." Meanwhile, the biggest potential government bailout of a generation sparked rallies in... 09/08/2008

A Radical Industry Restructuring is Upon Us- Mark Sunday morning, September 7, 2008, as the day the residential mortgage business changed forever.   " By the rude bridge that arched the flood, Their flag to April's breeze unfurled, Here once the embattled farmers stood and fired the shot heard round the word"    Emerson wrote " Concord Hymn " to emphasize a critical event happened that triggered something of global importance. Could yesterday be such a day ? Whether we see mortgage rates fall is a 64,000 question, Mortgage rates have not been the barrier to home buying, but the rates and fees have effected refinance.  It looks like the Treasury Department has laid the groundwork for the eventual dismantling of these once politically powerful (and once highly profitable) government chart... 09/07/2008

Well, it looks like those that hold Fannie and Freddie's preferred stock will be out of luck, as well. This will be particularly hard on some of the banks, who bought lots of this type of stock. This is not what the banks need at this juncture. From The Market Ticker... Bullet points: Both common and preferred stock dividends eliminated (not deferred) GSE portfolios will run down starting in 2010, 10% annually, until at a "safe" level (unspecified) Modest growth in MBS portfolio in 2009 Capital limits eliminated (since Treasury now must pony up whatever is required) Treasury to buy some MBS as necessary "temporarily" (only new MBS, however - no existing ones.  If the new underwriting standards are so good, how come they need to purchase them?) Senior and subordinated corporate debt will... 09/07/2008