Good afternoon. At Providence Home Mortgage, we do our best to assure that our clients have fully funded escrow accounts, and that they never have a shortage. We truly believe that it is extremely important to set up tax escrows based on the Assessed Value rather than the Taxable Value because we know that every municipality in Michigan will uncap the TV and bump it to the AV at point of sale. There is one main reason for this- in 1994 Proposal A was passed to protect current home owners from taxes increasing dramatically. Once this passed, a current owner would have their taxes rise slowly. BUT at point of sale, the TV jumps to the AV so that the local municipality can finally raise taxes to approximately 50% of value. I have attached the City of GR's Tax Appeal Form:
If you wish to appeal, you must get your paperwork in to the Assessor's office by Feb. 13th, and it must be mailed or delivered- no emails or faxes allowed!
I received my own assessment a few days ago, and in the second paragraph it reads,
State Equalized Value must be approximately 50% of market value. We all know this is true in theory, but is it in practice? Well, I personally believe that the City of GR may be off target on this issue. Here's a concrete example:
We bought a 2 unit investment property in May of 2005 at the top of the market for $99,900 with $2,000 in concessions. The house is on the west side in GR in a very low income working class neighborhood. We quickly realized we didn't like being landlords and tried to sell to no avail- twice in fact. We brought the house down to the mid-90s, and we finally came to terms with the fact that, due to the declining market, our rental is probably worth $85,000 at best. In fact, I have a current customer buying a nicer single family home one block down for $87,000! Over the past few years I've watched my TV and AV go up and down within a few hundred to $1,700 in either direction. I figured this was reasonable. Well not this year. My AV went up to $59,100, a $16,000 increase! My TV also went up about $1,900! So the City of GR is saying my rental is worth $118,200?! I'd like one Realtor or Appraiser to find me comps. to support this, and I'd sell today!!!
This has made me so frustrated that I decided to do a little non-scientific research. First, I contacted a trusted appraiser who was able to find me only one comp.- this was for a home that sold in Jan. of 08 for $85,000! Keep in mind that this comp. would never fly in today's market- you must have at least three comps. dated within three to six months, so no bank would consider this valid. The only other comps. he could find that were remotely similar in style and square footage were in up and coming SE side neighborhoods where the values are much higher! So, I decided to look online on the City's website in their BSA Software program. I looked at houses up and down the block from my rental, and I found some interesting information. Two-thirds of the homes where AVs went down were owner occupied! And 9 out of 11 homes where the AVs went up were investment properties! It appears the City may have a bias that landlords have the cash to pay WAY higher taxes, never mind the fact that finding good tenants was very difficult until recently because almost anyone could buy rather than rent.
We all know that we are in a declining market, and those of us in the industry know that there are no low down products for investors any more, therefore, drying up this buying pool dramatically and forcing the prices of investment properties down even further.
I understand that all city governments want to balance their budget, but I think it's a big myth to think all landlords are profiting. I can say that my rental has been a true loss each year I've owned it.
I personally am going to fight the battle this year and appeal for the first time!
I am excited to announce that ICCF will be hosting a Web cast/Pod cast of the Inauguration ceremony of Barak Obama in the ICCF Auditorium (located on the 3rd floor of ICCF which is located at 920 Cherry SE in Grand Rapids) on Tuesday. Coverage will start at 11:30 a.m. The event should last until approximately 1:00 p.m. Feel free to come early to assure a seat!
Well anyone still in the real estate/mortgage business knows that times are tough. For most, commissions are down and any vacation must be on a budget!
That being said, my husband, Mike, and I just returned from New Years in New York City, and we had a ton of fun on a beer budget!
First, we bought our plane tickets for $175 per piece out the door (see my blog http://activerain.com/blogsview/761519/Flying-Tips-This-Holiday-Season) several months in advance. And we got bumped to First Class each why by volunteering to take an alternate flight. We'd read earlier in Real Simple magazine this year that the airlines are overbooking flights in an effort to maximize flights, etc. So, each time, they asked for people who could take alternate flights- being that we were playing the entire trip by ear, we volunteered, and just for that, they didn't re-book us, but they moved us up to the front row! So then when they asked for volunteers to do the same on the way back, we thought, well, sure! And, once again, we got bumped to First Class! We were treated like royalty, again, on a beer budget!
And we stayed with two sets of friends who live in Brooklyn and the Upper East Side in Manhattan. So, of course, we couldn't thank all of them enough!
Aside from these two factors though, New York City was on our side! First of all, pubic transportation, in my opinion, is cheap. We road each way for $2.00 a ride, and you can get an MTA pass with no ride limit for $83 per month! I'd like anyone in Michigan to tell me that after insurance, car repairs, and gas (even if their car is paid off) that they can get around town for less than $83 per month per person! Oh how I long for a better transport system in Michigan!
Next we talked to the locals, and we found great bakeries, restaurants, etc. that were totally reasonable. In Brooklyn, I would totally recommend the Lord's Bakery! It's a Jamaican Bakery (www.yelp.com/biz/lords-bakery-brooklyn). We got Challah (sweet wheat pull apart type bread) for $2.40 per loaf! And we also got ends of this sweet sticky currant loan for 2 for $1.00!
I would totally recommend going for authentic Indian food in the Lower East Side in Manhattan to what they call Curry Row. What it is is a strip of restaurants on about two city blocks that is all Indian restaurants. I could totally appreciate the guys out front trying to pitch their specials. We tried out the Taj Mahal (http://www.yelp.com/biz/taj-mahal-indian-restaurant-new-york-2#hrid:FDNwcwcr_vDbTxSBQQVQVQ/querry:curry%20row). They were offering an all inclusive dinner for $8.95 per person. I am not kidding when I say "all inclusive". We each had a single serving appetizer, a cup of soup, Naan bread, some other flatbread that I cannot pronounce, a main dish (about the size of a lunch special), a coffee or tea beverage, and finalized with a bowl of pudding. I was uncomfortably full, but truly satisfied! For $1.00 more, our friend, Max, even had an extra piece of chicken! Needless to say, my chef husband has been on a total Indian kick for the past several days since we've been home, making Vindaloo stew, curry chicken, etc!
Thanks to Target Stores who are sponsoring museum nights, we were able to go to both the MOMA (Modern Museum of Art) (http://www.org/exhibitions/exhibitions.php?id=3994&ref=calendar) and the Brooklyn Museum (http://www.brooklynmuseum.org/exhibitions/dinner_party) for free! MOMA is free the first Friday of every month and the Brooklyn Museum is free the first Saturday of every month! The Brooklyn Museum was an awesome expression of the diversity of our country- they were hosting a funk dance party, and quite literally every ethnic, age, and racial group was present! One thing that amazed me is that they had a replica of a house that was in Brooklyn in 1891 that was a rural home! Brooklyn consists of six previous rural communities! It only took 120 years to grow into a major burrough of the largest city in the U.S. Also, there was an amazing exhibit of Judy Chicago's, The Dinner Party. This is an amazing testimony to the feminists of our country and abroad. 
Finally, my college friend, Lynn, and I went to see Gypsy on Broadway starring Patti Lupone (the mom on Life Goes On from the early 90s). Patti Lupone was outstanding (http://www.playbill.com/news/article/117360.html)! According to New Yorkers Broadway is really struggling which would explain how we were able to get tickets at a discounter for $36 with tax and fees. You can google "Cheap Broadway Tickets" and quite literally a dozen discounters will come up.
We even went to the David Letterman Show! That, too, was totally free, but I tell you, getting tickets wasn't easy! My hubby had to answer several questions- I guess they wanted to assure that the audience was full of true fans! There were so many security measures and checks we had to go through that I joked it was the safest I felt the whole trip! After attending the Live Studio Audience taping, and having done theatre in high school, I have SO much more respect for him and other entertainers- what you see at 11:30 p.m. was taped live that day with NO retakes!
All in all we had a fantastic time! If you have friends in the big city, and you worry that once you get there, it'll be too expensive, just talk with the locals, and you'll find reasonable everything!
Just when I think I've heard it all in the mortgage and real estate world, my mouth about hit the floor a few nights ago when I returned a call to an agent I had never worked with before. The agent had been referred to me by other agents in his office. The agent had left me a message earlier in a not so friendly tone, telling me how he'd tried to call me twice and that I hadn't returned his calls. This was actually not the case, so with my notes in hand I politely recapped the two times I'd left him messages. He told me he needed to talk with his kids because they were told not to erase his messages. I was thinking to myself, "you don't have a personal voicemail separate from your household phone?". So, in order to prevent this problem for the future, I asked if he had a cell (because I'd already looked him up on GRAR, our local real estate MLS system, and couldn't find him there- not a good sign). He proceeded to tell me that the home number was the best number. So, I explained I had looked him up in an effort to email him as well. Well, he isn't registered with GRAR yet because he's still working on his license! Yet again, not a good sign. So none of this should have surprised me when he grilled me with questions like, "how many points do you charge, what kind of fees, " etc. He proceeded to tell me that he used to be a loan officer and got out of the business because he was tired of the subprime market. So, his next question would make me think that, perhaps, the only time he'd had any success was when the subprime market was going strong.
After we discussed the typical amount I earn on a loan, be it in the way of fees and/or how we are paid by the banks we broker to, he asked the following question:
Do you have a bird dog fee? At this point I was growing increasingly frustrated with his attitude in general and had a strong suspicion this wasn't going to be good, but I asked, "What is a bird dog?", half feeling totally ignorant but half feeling like I was about to feel naive when he responded, "A fee for sending you the business." I quickly responded, "No, Mr. So and So, that would be a kickback, and that is illegal; it's a violation of RESPA!". He said, "I know. I was just asking."
I quickly wrapped up the call and thought to myself, well, this is what they were talking about it the loan officer prep course that people who commit fraud out BOLD!
The ethical dilemma is this, do I call his broker, do I report him to our local Realtor Board? What would you do?
Have you or your clients been stressed that down payment assistance went away in September?! Stress no longer! It is true that seller funded down payment assistance went away, but seller funded down payment assistance was only one kind of "DPA". I am sure that it had its place and was used often enough, however, in five years of doing loans, I never used seller funded DPA, not even once! Why?! Because I am the Queen of finding my income qualifying clients down payment grants from City http://activerain.com/blogsview/834247/City-of-Grand-Rapids-Down-Payment-Assistance-Program-we-CAN-make-it-work, Non-profit, or Bank grant programs, grants that don't result in the increasing of sales price (which can be really tough to get by underwriting in our declining Michigan market).
So, let me tell you about HOP Funds. HOP (Home Ownership Program) Funds come from the Federal Home Loan Bank, and they get assigned to different banks. We just so happen to be fortunate that one of our bank partners gets enough funds to pass around. Some might think it is incredible that a bank would allow a broker to use these funds that they could keep in house. It is pretty incredible, but I think their mindset is, better to use them than lose them!
Key requirements are:
For more information, give me a call at (616) 719-4513
I specialize in first time home buyer products including FHA, MSHDA, and Rural Development. I use true down payment grants for my buyers from local and state housing authorities.
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