Brad Warnock

Just a quick update of some of the recent changes in Mortgage Rates, Appraisals, and Tax Credit guidelines. If you have any questions please contact me at 404-272-8037, bradwarnock@remax.net or visit www.BeAtTheLake.com

Mortgage Rates Surge to Highest Point of the Year

Mortgage rates shot up significantly for the second straight week. Rates have now risen nearly 1% in a 15 day span. This has brought an abrupt end to the refinance boom and has been devastating information to pass on to many potential home buyers. Here is a brief overview of the main reasons rates pushed higher last week.

1. An improving economy. The economic outlook continues to improve sooner than expected. Last week, report on Pending Home Sales, Personal Income, Outlays, and Construction Spending all came in stronger than expected. Then, Friday's Employment report was the exclamation point on two weeks of improving data. Although the unemployment rate actually increased, the number of jobs lost (345k) was far less than anticipated (525k). The labor market is typically one of the last areas to show improvement during an economic rebound, so any positive signs are particularly significant. Further strength in economic data will do little to help mortgage rates improve.

2. Bernanke comments. The Fed Chief chimed in with comments supporting the notion that the recession would end this year. In testimony before Congress, he stated that he expects the economy to move higher later this year (although he said it may take a while for the economy to return to even average levels). These cheery comments certainly didn't help with rates.

3. Inflation concerns. In his talk to Congress, Bernanke tried to calm the markets by claiming that inflation remains tame, but investors weren't buying it. Investors are very concerned about the supply of new debt that will be needed to pay for all of the government stimulus programs. Any way you slice it, big government spending leads to higher rates.

4. Surging oil prices. Oil prices continued to rise and are now up to over $70 per barrel. If you look back, there is an amazing correlation between oil prices and long-term mortgage rates.

5. An unresponsive Fed. The Fed's program to buy Mortgage-Backed Securities has been the catalyst of rates dropping so low. However, at this point, most investors believe that the Fed is not inclined to expand its Mortgage-Backed Security purchase program beyond its current level of $1.25 trillion. Unless the Fed announces something different, the party with low, low rates may indeed be over.

How are the Appraisal Changes Affecting You?


The 'Home Valuation Code of Conduct' (HVCC) has been in place for only five weeks, but there are already realtors, loan officers, sellers, and buyers all over the country pulling their hair out as a result of the significant changes in how appraisals are now done. As a quick reminder, HVCC limits who can order an appraisal for Conventional loans (HVCC does not apply to FHA loans). No one whose pay is tied to volume in any way (such as commission or bonus) can order an appraisal and this includes loan officers, processors, support staff, and even underwriters (this essentially rules out most everyone in my office). Not only can all of these parties not order an appraisal, they also can't even know who the appraiser is or ever talk to them about value. Instead, the appraisal has to be ordered through "an independent and impartial process."

I certainly understand the intention of this new act. There has been a lot of fraud in the industry and a lot of collusion between mortgage loan officers and appraisers. Unfortunately, a few bad apples have ruined the whole process for everyone in the industry. The end result is a new system that is going to adversely affect all of us at some point in the future. In fact, many real estate deals have already fallen apart over the last month. With this in mind, I give you five killer B's to help you stay out of trouble when it comes to the appraisal process.

1. Be aware. Don't live with your head in the sand. The system has changed. You are going to be affected.

2. Be knowledgeable. Don't just know who the loan officer and lender are doing the loan, also know who they use for their appraisals. Most big banks and mortgage brokers are now going to national appraisal firms. Talk about a disaster waiting to happen! If a national appraisal firm is involved on one of your transactions, then expect low quality, poor service, delays, higher costs, and appraisers who have a limited knowledge of the area.

3. Be patient. Plan on the process taking longer. Expect delays and problems, and be aware that Conventional appraisal rushes are a thing of the past.

4. Be smart. Leave plenty of time in the sales contract for the appraisal contingency to be worked out. I suggest at least 20 days.

5. Be careful. Be very cautious of where you send your clients to get their mortgages. Its really not all about rate. In fact, the rate doesn't matter much of all if the transaction gets killed over a bad appraisal!

Our solution to HVCC has been to create a new appraisal ordering system which has enabled us to retain all of our existing appraisers. A computer assigns each appraisal on an unbiased rotating basis. Our system turns around appraisals in a timely manner, assigns only appraisers who are knowledgeable of the area, and has not increased the cost of appraisals by even $1. We only work with appraisers who look for ways to make transactions work. Although we can't talk to the appraisers directly, they know to contact the realtors involved if any value issues arise. The bottom line is that our system is reliable and it is working!

Tax Credit

Last week, I sent out an overview of the new State of GA Tax Credit, however, I left out one very important detail. The subject property must either be a foreclosure or the property had to be listed on the market as of May 11th. If someone buys a home listed after May 11th, they are not eligible for the tax credit unless it is a foreclosure. Here is a great website with all of the tax credit details: http://www.hbag.org/page.asp?pg=Georgia+Homebuyer+Tax+Credit

Rate Update

Mortgage bond yields are now at the highest point since Nov 25, 2008:

	Conforming	Non-Conforming	FHA	VA
Loan Amount	< $417,000	> $417,000	< $346,250	< $1,000,000
30 Year Fixed	5.500%	6.500%	5.500%	5.500%
15 Year Fixed	5.125%	6.375%	5.500%	5.500%

Good Afternoon. This blog is a follow up piece, to Lake Oconee, about docks and seawalls on Lake Sinclair. This is only general information. I will be happy to expand on this information should anyone want to inquire further but for the time being here are the general guidelines:

L a k e S i n c l a i r

Seawalls

• Seawall construction will require proper erosion and sedimentation controls. After completion of seawall and until the vegetative buffer is restored, a silt fence must be installed and maintained just behind the new seawall at ground level and a row 26' inland from wall. All disturbed ground within the 25' vegative buffer will be covered with straw or sod.

• Plans should show the following:

1. the length of shoreline to be fronted by the seawall.

2. the type of foundation to be installed and depth below ground line.

3. the type of materials to be used for construction of the seawall.

4. the height of the seawall should be no higher than necessary to stabilize shoreline.

5. a re-vegetation plan.

• The distance between the proposed seawall and the existing shoreline shall not exceed 2'. The location of the proposed seawall must be staked at 25' intervals in order for inspectors to assure the original contour is adhered to as close as possible. For very irregular shoreline, stakes shall be no more than 10' apart.

• Creosote timbers are prohibited for new seawall construction.

• New seawalls constructed with concrete block will require the blocks to be filled solid with concrete and stucco must be applied to the lakeside of the wall.

• GP requires placing rip-rap along the base of all seawalls. This application helps reduce undermining and restores shoreline habitat. Recommended amount from normal (full pool) water level: slope ratio of 1' of width per every 1' of depth.

Docks

• Regarding newly established lots or developments platted after 2000: A minimum lot width of 100' is required for all shoreline structures. Seawalls are the exception.

• There is a minimum 15' setback from side lot line or any such extended imaginary lot line as determined by extending line lakeward.

• Only one dock is allowed per lot.

• Docks may be floating or stationary or a combination of both. Only approved encapsulated or Dow Polystyrene flotation will be permitted for use with floating docks. Metal drums, plastic barrels, modified pontoon boats and other such items or materials are prohibited.

• Dock color may be brown, beige, gray or natural.

• Docks cannot extend beyond other shoreline improvements, and should not exceed 50' in length from the shoreline.

• Maximum dimensions on any portion of a dock are 16' x 20' with no single dimension exceeding 20', with 16' side parallel to shoreline.

• The minimum width of walkway is 4'. Maximum width, 6'.

• Plumbing, other than water spigots and pumps, is prohibited.

• Replacement of unapproved flotation may be required at the time of any dock renovation or replacement. Replacement of unapproved flotation will be required at time of lease/license renewal or transfer.

Due to the many and varying types of docks on Lake Sinclair it is best to check with your real estate agent or Georgia Power to find out what you may or may not be able to construct or modify. I have additional information on dock and seawall types. If you would like this additional information just let me know at 404-272-8037, bradwarnock@remax.net, or www.BeAtTheLake.com.

Take Care

Brad

Good Thursday Morning. With Lake Season right around the corner I wanted to give a quick update on Lake Oconee's guidelines for seawall and dock permits. I'll be doing a follow up piece on Lake Sinclair and it's 2009 guidelines in the next couple of days if you would like to check back for that as well. The 2009 guidelines are as follows:

L a k e O c o n e e

Seawalls

• Due to changing environmental requirements, this document is to be used only as a guideline. Consult your local GP Land Management Office for current seawall regulations and requirements.

• Seawall construction will require proper erosion and sedimentation controls. After completion of seawall and until the vegetative buffer is restored, a silt fence must be installed and maintained just behind the new seawall at ground level and a row 26' inland from wall. All disturbed ground within the 25' vegetative buffer will be covered with straw or sod.

• Plans should show the following:

1. the length of shoreline to be fronted by the seawall.

2. the type of foundation to be installed and depth below ground line.

3. the type of materials to be used for construction of the seawall.

4. the height of the seawall should be no higher than necessary to stabilize shoreline.

5. a re-vegetation plan.

• The distance between the proposed seawall and the existing shoreline shall not exceed 2'. The location of the proposed seawall must be staked at 25' intervals in order for inspectors to assure the original contour is adhered to as close as possible. For very irregular shoreline, stakes shall be no more than 10' apart.

• GP requires placing rip-rap along the base of all seawalls. This application helps reduce undermining and restores shoreline habitat. Recommended amount from normal (full pool) water level: slope ratio of 1' of width per every 1' of depth).

Docks

• Regarding newly established lots or developments: A minimum lot width of 100' at the shoreline and GP property line is required in order to have any shoreline structures. Seawalls are the exception.

• There is a minimum 15' setback from side lot line or any such extended imaginary lot line as determined by extending line lakeward.

• Only one dock is allowed per lot.

• Docks may be floating or stationary. Only approved encapsulated or Dow Polystyrene flotation will be permitted for use with floating docks.

Metal drums, plastic barrels, modified pontoon boats and other such items or materials are prohibited.

• No portion of a dock may be covered.

• The total length of any dock shall not exceed 50'.

• Maximum dimensions on any portion of a dock are 16' x 20' with the 16' being parallel to the shoreline.

• The minimum width of walkway is 4'. Maximum width, 6'.

• "T" or "I" shape docks are prohibited.

• Plumbing is prohibited.

• Replacement of unapproved flotation may be required at the time of any dock renovation or replacement. Replacement of unapproved flotation will be required at time of lease/license renewal or transfer.

• Color of docks must be brown, beige, gray or natural color.

* These rules are subject to change at Georgia Power's discretion.

Oconee is a great fishing, golf, and recreational lake. As always is you have any questions about the article or real estate in the area please let me know. 404-272-8037, bradwarnock@remax.net or www.BeAtTheLake.com

Take Care

Brad

Good Morning. Its finally April and we are appropriately kicking it off with showers all day. Once again activity is beginning to pickup again here in Georgia's Lake & Golf Country. I again have updates to one of the gated golf communities in the area, Harbor Club. The, Tom Weiskopf/Jay Morrish, golf course is easy one of the best values on the lake for the golf you get at the price you get it for. Below is a quick run down of the 2009 Memberships.

This is a great course. I encourage anyone who is looking to get great golf at a reason rate, on Lake Oconee, to come out and give this course a try. Who knows maybe we'll bump into each other. As always if you have any questions about this community or others in the Lake Oconee or Lake Sinclair areas I'll be happy to help. Just let me know 404-272-8037, bradwarnock@remax.net, or www.BeAtTheLake.com

Take Care

Brad

Good Morning Again

Here is a little follow up from the Reynold's Plantation incentives blog with the new Cuscowilla's incentives.

As you can see some of America's best course are right in your back yard and for a limited time these Clubs have great incentives. If you would like to know more or have any questions please feel free to contact me at 404-272-8037, bradwarnock@remax.net or www.BeAtTheLake.com