Posted on: 05th Apr, 2010 07:46 pm
I am finding out that a lot of loan in our area are being modified. instance where if the owner paid 400K and since now the property is worth 250K they are writing off 150K. Even though this write-off is happening it is not being reported on the county assessment or any website. I am first time home buyer and trying to buy a new property . How do I know what a property is worth if the new prices are not being reported any where. ?
Also not all lenders are writing off principle so what should his neighbor do when he knows he just lost 150 to 200K ?
Also not all lenders are writing off principle so what should his neighbor do when he knows he just lost 150 to 200K ?
Hi kesarwanip,
While you buy a property, it will be appraised by a property appraiser. After the appraisal is complete, you will get to know the exact value of the property. Thus, you will get the mortgage depending upon that value of the property.
Those lenders who are not reducing the principle balance are lowering the interest rate for mortgage payments. The term of the loan is increased in this case. However, I don't think this needs to reported anywhere.
Take care.
While you buy a property, it will be appraised by a property appraiser. After the appraisal is complete, you will get to know the exact value of the property. Thus, you will get the mortgage depending upon that value of the property.
Those lenders who are not reducing the principle balance are lowering the interest rate for mortgage payments. The term of the loan is increased in this case. However, I don't think this needs to reported anywhere.
Take care.
So how are the properties being appraised in cases where a write off is not being reported. Is it being based of the county's Tax assessment ?
Hi kesarwanip,
The appraiser will appraise your property depending upon the value of similar properties located in your area. You can contact an appraiser and he will let you know the details.
Thanks
The appraiser will appraise your property depending upon the value of similar properties located in your area. You can contact an appraiser and he will let you know the details.
Thanks
I think you are becoming confused about the terms being used. There is a big difference between "price" and "value". An appraiser will provide an opinion of "market value" for a property. This means that they will conclude, based on market data, what a potential buyer would likely pay for a specific property. "Price" is the amount actually paid for a property and may or may not equal the "value".
In the scenario you are describing, the lenders are writing down the principle owed on the current loan. This has absolutely nothing to do with the previous sale price or the value of the property, other than they probably used the value of the property to determine how much they are going to modify the loan. In many cases, like Sara pointed out, the lenders are not writing down the mortgage amount, they are just changing the terms of the loan to make it more affordable. Typically the only time they are writing off principle is during a on the property. The reality is that, regardless of the current value, a buyer agreed to purchase a property for a specific amount and agreed to a loan for a specific amount. Legally, they are bound by the terms of the security deed, otherwise, the lender has the right to accelerate the loan or take the property back.
Now, the tax assessor value is not necessarily a good indicator for the propertys current market value. That value is based on the assesss opinion of value as of a designated time for all properties to be assessed for taxes (usually the first of the year in most counties). They are also looking at major shortfalls in county governments and are not dropping the value significantly unless you try to dispute it. So dont be surprised if you see the tax assessos value much higher than the actual market value or sales prices in the neighborhood.
I hope this information helps!
In the scenario you are describing, the lenders are writing down the principle owed on the current loan. This has absolutely nothing to do with the previous sale price or the value of the property, other than they probably used the value of the property to determine how much they are going to modify the loan. In many cases, like Sara pointed out, the lenders are not writing down the mortgage amount, they are just changing the terms of the loan to make it more affordable. Typically the only time they are writing off principle is during a on the property. The reality is that, regardless of the current value, a buyer agreed to purchase a property for a specific amount and agreed to a loan for a specific amount. Legally, they are bound by the terms of the security deed, otherwise, the lender has the right to accelerate the loan or take the property back.
Now, the tax assessor value is not necessarily a good indicator for the propertys current market value. That value is based on the assesss opinion of value as of a designated time for all properties to be assessed for taxes (usually the first of the year in most counties). They are also looking at major shortfalls in county governments and are not dropping the value significantly unless you try to dispute it. So dont be surprised if you see the tax assessos value much higher than the actual market value or sales prices in the neighborhood.
I hope this information helps!
