Nehemia games

[Blue1]

Here's a new one on me...Purchase...Borrower getting DP Nehemia assistance. Agent lowered the list price on the same day the property went under contract. The amount lowered corresponds with Nehemia seller contribution so, the sale price is now at the original list price.

The sale price is actually supported by good comps that have no concessions....I am confused...

 

[Mztk1]

The gift providers are working on a new bill that will allow them to continue operating. They are on their best behavior now.

 

[Couch Potato]

Legal Mortgage Fraud.

Here's a new one on me...Purchase...Borrower getting DP Nehemia assistance. Agent lowered the list price on the same day the property went under contract. The amount lowered corresponds with Nehemia seller contribution so, the sale price is now at the original list price.

The sale price is actually supported by good comps that have no concessions....I am confused...

It is a legal form of mortgage fraud. It does require a cooperating appraiser to make it work. It will be illegal after October 1, 2008. (Assuming the recent house bill to keep it does not go anywhere.)

 

[Blue1]

How am I cooperating? My job is to ascertain a Market value for the subject NOT to lower OR RAISE (added) the value of the subject due to it's financing. Still confused....

 

[Walter Kirk]

This is as easy as 1,2,3.
1) Fully discuss the marketing history of the property and the agreement of sale.
2) Disclose the seller concessions.
3) Ignore the agreement and the concessions and determine the market value

 

[Couch Potato]

How am I cooperating? My job is to ascertain a Market value for the subject NOT to lower OR RAISE (added) the value of the subject due to it's financing. Still confused....

I did not mean to imply you were cooperating. You recognized something doesn't make sense. As long as you do an honest appraisal with full disclosure of the list price, you will likely do a good job, otherwise you would not have posted here.

 

[ZZGAMAZZ]

I do not know what "Nehemia" means and a Google search didn't help.

Please advise how one might recognize this factor in a comparable sale.

 

[Couch Potato]

He just spelled it wrong. It's Nehemiah.

 

[CURT VAN HOOSER]

I do not know what "Nehemia" means and a Google search didn't help.

Please advise how one might recognize this factor in a comparable sale.

Question the listing/selling agent...

 

[JSmith43]

In many parts of the Minneapolis metro area it is obvious that the market has a distressed segment and a not as distressed segment

Let's say 1/2 of the sales are between sellers and buyers that are typically motivated (no undue distress) and the other 1/2 are made up of sellers that are upside down and going down and opportunistic buyers that can accept delays and the uncertainty of the short sale process.

The first 1/2 fits the definition of market value (yeah, some FL and CA areas, it probably seems like most are that way). The second 1/2 really doesn't because they are essentially performing a liquidation with the aid of the loss mitigation department which is under pressure from the bean counters to raise cash so their credit rating doesn't go in the dumper thereby raising their cost of doing business, and their ultimate solvency.

I have started originating seller funded DAP loans for purchase of these short sale and REO opportunities and don't have any feelings of guilt whatsoever, given their function. These are not deals that are valuation problems if the appraiser uses non REO and non-short sale comps, which should be the case in most local markets for a MV based appraisal.

Most of my buyers of these distressed properties that use the 403c charity entities to purchase at or near zero down, have money in the bank sufficient to pay a minimum 3%, but, now they have a reserve cushion. They are smart to maintain a cushion and to buy low (and eventually sell high).