About Oakland County, MI

Going From Mark-To-Market to Mark-To-Make Believe!

By Robert Pliska

Have we gone from "mark-to-market" to "mark-to-make believe"? The FDIC just released its policy statement - Prudent Commercial Real Estate Loan Workouts. The FDIC's purpose is provide transparency and consistency to commercial real estate workout transactions and not curtail the availability of credit to sound borrowers. While the FDIC's intentions are honorable, the policy may provide the opposite effect - lack of transparency and consistency and extending the lack of credit to sound borrowers.

The key point of this policy statement is - loan workouts need to be designed to help ensure that the institution maximizes its recovery potential. Renewed or restructured loans to borrowers who have the ability to pay their debts under reasonable modified terms will not be subject to adverse classification solely because the value of the underlying collateral has declined to an amount that is less than the loan balance. So if the borrower and/or its guarantors can still make the payment and the financial institution would prefer to extend the loan rather than take a loss, the fact that the property is worth less is not the determining factor.

The loan can be in good standing if the borrower/guarantor can show that they can still make payments. New appraisals need not be ordered if an internal review by the institution appropriately updates the original appraisal assumptions to reflect the current market and provides an estimate of the fair value for impairment analysis. Documentation should demonstrate a full understanding of the property's current "as is" condition. However, if the institution intends to work with the borrower to get a property to "as stabilized" market value, then the institution can consider the "as stabilized value" in its collateral assessment for credit risk rating. This seems to be heading far to the "make believe" area. Just present a "good story" and the institution can buy a lot of time.

This "good story" accounting will provide more of a lack of transparency and consistency. Two people, for example, can tell a "good story" much differently. It will probably make the FDIC's job more difficult. In the 1990's, for example, banks in Japan were allowed to avoid taking losses and write-downs. The result was an entire decade of stagnation. The steps by the FDIC could create a parallel situation. This may extend the time of lack of credit to borrowers. Let's get back to reality rather than "make believe". Hopefully, our commercial real estate problems may be resolved sooner. For further discuss ion of this topic, feel free to contact the author Robert Pliska, CRE, CPA.

As buyer's agent we need to know the answers to the Home buyer tax credit Frequently Asked Questions. It is very embarrassing if your buyer knows more about the changes in your profession then you do. Please see the below NAR FAQ Sheet for the Home buyer Tax Credit Changes.

READ it NOW!!! I assure you in today's instant messaging world, your buyer knows about these changes 10 seconds after they happen.

Happy house hunting.

Mike Sher, Max Broock, Bloomfield/Birmingham Michigan

(248) 644-4700 x242, mike@mikerealtor.com

Great news for all of you Buyers & Sellers!!! The Home Buyer Tax Credit is out and looks great.

Buyers:

• Starts December 1st 2009 to April 30th 2010
• $8000 for 1st time home buyers
• $6500 for current homeowners
  • Current homeowners "Must have used the home sold or being sold as a principal residence consecutively for 5 of the 8 previous years."
• Must have contract to purchase by 4/3/2010
• Must close by 7/1/2010
• Income limits:
  
  • $125,000 single income
  • $225,000 married

Sellers:

• More buyers are going to be in the market to buy your home.
  
• Reduced inventories will raise sale prices
• less foreclosures

Read below for more details below from NAR

Mike Sher, CDPE: http://hosted.cdpe.com/MikeRealtor/ Office: (248) 644-4700x242 Fax :(248) 499-1020

4120 Telegraph Rd, Bloomfield Hills, MI 48302

E-mail:mike@mikerealtor.com

CDPE (Certified Distress Property Expert) MCAR,

Short Sale Trainer Max Brook and Real Estate One Short Sale Specialist.

The Mike Realtor Team Blog - Metro Detroit/Oakland County Servicing in Southeast Oakland County, Auburn Hills, Birmingham, Bloomfield, Berkley, Beverly Hills, Canton, Clawson, Farmington Hills, Ferndale, Huntington Woods, Northville, Novi, Pleasant Ridge, Plymouth, Royal Oak, Rochester Hills, West Bloomfield, Troy, etc.

Lately I have been showing Rochester and Rochester Hills homes to two different buyers. Rochester is a nice stable community. Located off I-75 or M-59 it is not too far from the City of Detroit.

What I have been noticing is that many colonials have been selling for very reasonable prices. I have looked at so many Rochester Hills homes. If you look at the Rochester Hills homes under $250,000 you will notice that they are selling under a $100,000 a square foot.

Many selling for under $80 a square foot home. Some of these Rochester homes were move in ready. Now that is a deal.

I think there still are some bargains in Rochester Hills if you are looking to buy. Information courtesy of RealComp II Ltd.

What and how are they looking to accomplish?

Officials for The Township of Milford MI are currently reviewing the ordinance language that governs solicitation. It is stated that at a recent Board of Trustees meeting, Trustee Dale Wiltse proposed a new ordinance for Milford MI that requires any street vendor, solicitor, peddler, transient merchant, or charitable solicitor to purchase a license from The Village of Milford MI and that this ordinance is merely for safety and not revenue purposes

As your local Milford MI REALTOR® -

I have elected to partner with REMAX Platinum and am proud to show this off. I do not mind registering with the municipality at all, as long as the fees are not outrageous. When I am out meeting and speaking with others, I where my identification tags so they are very visible to those I am speaking with and always begin by introducing myself and the company I represent.

As a Milford MI Homeowner and lifelong resident -

I speak for everyone within my household and family by stating

"I like to be absolutely positive that the person standing in front of me is who they say they are and are representing the stated company/organization as well". I feel that this ordinance is an expense to all of us Milford MI residents.

Let's break it down... The municipality will have to pay someone to generate and track these licenses.

How much does the Village of Milford Clerk get paid hourly to issue and track each license? vs. How much will a license cost?

Does this Village of Milford Clerk have this extra time available that it will require for such an added responsibility?
Or,
Will Milford MI have to hire (pay/employ) another person?

Do we really think that by making honest ones register (put their personal information on an index card) it will keep the dishonest ones away?

Eagerly looking forward to all of your opinions on this...

Cordially,

Wendy Valko, CDPE
Certified Distressed Property Expert

Visit www.LiveInMI.com (your one stop resource center) for current Real Estate information and answers. Or, call Wendy today at 248-762-5290 for your free, confidential, no obligation, professional, Real Estate conversation.

Pass me on - If you know of anyone that could benefit from my Professional Real Estate assistance, do not keep this information to yourself!

Source: Spinal Column 10/21 Edition