Tag Archives: mortgages

QV Report offer expires 25th Oct

At the beginning of October Quotation Value NZ  made an offer like they did back in 2006.

By going to their site here you can check QV’s House Value Tracker for free.

When I tried it, I found you could check on up to 5 properties to see what QV believes their value is worth.

They mentioned in an earlier email that this freebie expires on 25th October 09 so you’ve still got a few days yet.

I heard this week from a lending facilitator……..some banks are offering free valuations as another tool in their “persuader packs.”

There has been much debate, here and elsewhere over the accuracy of these figures in relation to a properties current market price.

I am hearing that QV’s figures are considerably below what the properties are selling for on the current market.

In fact, testing a some Sold properties in your region may highlight the differences.

So I decided to test the 3 properties that I’ve sold this week.

Property 1 Stoke – Sold for 8% above QV’s figure

Property 2 Stoke – Sold for 0.5% difference to QV’s figure

Property 3 Richmond – Sold for 9% above QV’s figure

Mixed results I’d say.

My concern is if they are using this figure as their LVR (Loan to Value Ratio) you might have problems with securing a satisfactory loan, that is a sufficient amount to complete your purchase.

This is certainly not too say that as a final tick to the loan process, a lender may require a Registered Valuation, however what I’m talking about here is the initial application processing stage.

As long as its applied across the board that would seem fair, but it does make one wonder whether an element of selective screening could be happening?

Any finance industry folk care to set me straight on this?

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Flippin’ US Real Estate Agents

Are curious about why home prices / values haven’t dropped “at least 30% from their peak” here in NZ, but have in other countries?

Other countries, whom I have read it said that “cough…and we here in NZ sneeze” then perhaps you may find reading this expose interesting when comparing the NZ situation to that of the USA.

How fortunate we are in this part of the world that the loan situation didn’t get so far out of tune with reality. Against this sort of activity then its logical and no wonder at all why values there have dropped so much, and why there are so many foreclosures. (repossessions in Kiwi talk)

One might think the transactions on the above property were just a tad suspicious?

This week the Sarasota Herald Tribune has been telling the results of what they say is a 12 month investigation and on the surface the reporting looks quite well researched. In the land of litigation they would want to be.

This week they are currently midway through publishing their findings/revelations in regard to the devastating ramifications of what was once a very popular hobby in Florida “flipping homes.”

Amid interesting snippets like….

“More than 100 properties from Palmetto to North Port doubled in price in a single day during the recent real estate boom”

…the Sarasota Herald Tribune goes on to state that they believe the toll to “Gulf properties” so far stands at half a billion dollars.

In researching the series the paper examined more than 3,000 property “flips” since 2000 in the Florida regions of Sarasota and Manatee counties.

The photo and caption below appeared in the paper yesterday. The Realtor chap mentioned was also featured in another article just recently too.

The paper reports “Based on interviews with more than 100 investors and real estate professionals and a review of thousands of pages of deeds, mortgages, foreclosure filings and other public records, the Herald-Tribune found…”   heaps!

You may ask yourself, did they get any warning that it would be this bad, well it turns out yes, in this paper from none other than the Dept of Law Enforcement Commissioner himself. Obviously in a “still, what would he know” moment it appears practically no one took any notice of this sobering document at the time?

Here’s the articles so far published….

‘Flip that house’ fraud cost billions

The King of the Sarasota flip

Flippers’ toll: On Gulf Coast, half a billion in defaults

Flipping fraud ignored by police and prosecutors

fabulous series of Interactive charts and graphs they have put together to compliment the series too

and they still have more reports to be published so here is the home landing page or the series home to keep up to date.

** “what not to do” is probably a bit past tense because hopefully with the new stricter banking codes we should never see anything like this again.

SOURCE – Sarasota Herald Tribune Special Investigation on Flipping

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Valuer sued $2m for overvaluing properties

An article in the June 2009 edition of the Australia and New Zealand Property Journal highlights this fact.

In the case of Adelaide Bank Ltd v DTS Property Services Pty Ltd [2008] NSWSC 1328 (4 December 2008) originally brought before the New South Wales Supreme Court, Adelaide Bank contested that a valuer had allegedly been negligent in providing valuations on certain properties, for which the bank in turn, based on those valuations, ok’d relevant mortgages.

In case you don’t want to read all the print, it turns out that the bank was successful in its court action against the valuer, and judgment for just under $2million was entered against the valuer, plus legal costs and interest.

According to the article in the Australia & New Zealand Property Journal it was reasonably constituted that in the case of 2 different valuers, each acting reasonably, separately and in good faith, could rightly differ in their projected valuations as to the value of the same property on the same day, but the bank stated that in its opinion, any difference greater than 10% constituted negligence in itself.

In this case the Court accepted the banks contention and found indeed that the valuer had been negligent. For the findings, point by point, please click here to go to the case.

One wonders if there are any other unhappy home buyers out there, who substantially in part made their decision to purchase based on a valuation, which after a future valuation (once they were occupiers) subsequently turned out to be much less favourable than the first one. (while obviously taking into account & consideration, market conditions over that period)

I’m not a lawyer and this was an Australian case, but in the early 2000’s there were plenty of sprukiers conducting seminars on “flipping” properties and from memory, they weren’t backward in coming forward when it came to advising you of a “preferred” valuer to use.

Anyone in NZ had such an experience?

ARTICLE SOURCE – Australian & New Zealand Property Journal JUNE 2009

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Mortgagee Sales have “doubled” in Nelson

The coming of the Worm Moon last night in the Northern Hemisphere may have the property hunters out in force this weekend scouting for a bargain. But they’ll have to look just that bit harder this month.

As anyone driving around town this week will attest, there’s a lot more SOLD signs out now. And there is no doubt, numbers visiting Open Homes have increased markedly.

Nelson’s mortgagee sales have doubled according to the latest information complied by Terralink and contained with-in the inaugural “Mortgagee Sales Report.” This one indicates it covers the period Nov-Dec 2008.

It was only a few days ago that Blue Hancock, of Quotable Value Valuations said in his companies 9th March press release headed Market activity up, values still declining, that

“Quality properties in good locations are attracting much more interest than properties in poorer condition or in less desirable locations.”

RBNZ this morning dropped the OCR to 3%, a new historical low for NZ. Uppermost in the fiscal types minds is that our currency still needs to look attractive for forex investors globally, and that it remains competitive in international capital markets.

In that vein, RBNZ is saying it believes that present interest rates are “very stimulatory” and signaled its intentions that “any future cuts will be much smaller than observed recently.”

At the press conference after the OCR announcement, Dr Bollard said that “current projections were consistent with the OCR troughing at 2.5 per cent” but mentioned that he wouldn’t rule out 2.0 per cent if conditions worsened.

Back to Blues statement above, there will come a time when I’m sure we will have the media talking about a “surge in buying”, or headlines like “the ripe time to buy is now.”

So in closing I’m compelled to ask this question of present potential buyers…..

“will you be the only one out looking to buy because all the papers have said now is the perfect time to buy?”

Depending upon how you answered that, (& keeping in mind interest rates + the chart in this article) consider for a moment what the effect might be if you weren’t the only one out there looking to buy when your dream property comes up at just the right price, …….just what do you think the effect will be on that properties price?

Mortgage Commentary 14th January 2009

Reserve Bank of New Zealand

Image via Wikipedia

A brief comment from Mark Papps on Fixed Mortgage rate loans.

Set amongst the continuing downward trend in Official Interest Rates, there is much anticipation and also speculation as to what will unfold at the next Reserve Bank of NZ meeting. The next announcement is down for the morning of Thursday 29 January 2009.

Its widely believed that the current 5% OCR rate will fall again, although this time around and different from Dec 2008, the RBNZ won’t be able to watch & follow the direction set by the Reserve Bank of Australia who won’t meet til 3 February 2009, after our meeting and following announcement. So without that prior rate direction from Australia its back to the crystal ball.

I have been contacted by many current fixed rate mortgage holders over the last month, investigating their options with regard to breaking their current fixed rate loan so that they can take advantage of the lower rates currently on offer. If they are just 1-2 years into a 5 year loan then they will probably be surprised at the “termination” fee.

If on the other hand they only have 6-12 months to run on their current fixed rate mortgage the options can stack up much more favourably.

Be aware that when you take a mortgage out with a financial institution many times they have organised that money through an intermediary, or as is more popular have packaged your loan up with many others and then sought corresponding funding. Banks follow business principles too, and shop around, just like any other business would do. Now that you have decided your fixed interest rate is too high and want to break your fixed rate mortgage, in turn the financial organisation that provided it to you can’t just go back to where they got there funds and say “Hey this is too high, we want to break / stop it.” And this is where the banks are coming from when they want to charge that sum for choosing to break your fixed rate loan.

Secondly and more importantly if you are presently contemplating doing this in the next 1-2-3 months then you had better give me a call now. Now, why? Well if the next cut is say 1%, then the financial facility who provided you with that loan will tack that extra 1% on to their calculations, and up their “termination” fee. Put simply you will pay a much higher fee.

If you’re unsure about any of this just contact me and I can explain.

Regards, Mark Papps

♣ NZMBA – Nelson Marlborough Mortgage Broker of the Year 2006, 2008

♣ NZMBA – New Zealand Mortgage Broker of the Year – 3rd in NZ for 2008

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Mark Papps is the Manager of Nelson Marlborough Mortgage Services. He specialises in Home Loans.