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Trent Warner's Blog

By Trent Warner Monopoly Builder | Mortgage Broker
or Lender in Cincinnati, OH
  • Mortgage Forms Should Include More Transparency, Appraisal Institute Tells Federal Reserve

    Posted Under: Financing in Cincinnati, Property Q&A in Cincinnati, Home Insurance in Cincinnati  |  January 6, 2011 5:54 AM  |  290 views  |  2 comments

    The nation's largest real estate appraisal organizations called on the Federal Reserve last week to require appraisal management companies to disclose their fees to consumers as the Fed implements landmark appraisal regulatory reforms passed by Congress.

    The Appraisal Institute and the three other professional appraisal associations, together representing more than 35,000 members, also urged the Fed to reconsider how it interpreted language in last year's Dodd-Frank Act requiring appraisal management companies to pay appraisers "customary and reasonable" fees.

    Under current interpretations of the Real Estate Settlement Procedures Act, "Consumers are led to believe the Appraisal Fee' being paid to a creditor is for a property appraisal, when in fact it is for the appraisal as well as appraisal management services," the Appraisal Institute, the American Society of Appraisers, the American Society of Farm Managers and Rural Appraisers, and the National Association of Independent Fee Appraisers told the Federal Reserve System's Board of Governors in a December 27 letter. "We believe the RESPA policy that compels consumers to pay for both the appraisal fee and the AMC fee as a bundled fee is in dire need of reexamination. Additionally, we recommend that the Board, in subsequent rulemakings, use their authority to require the separate disclosure of fees paid to appraisers and fees paid to AMCs on the HUD-1 form."

    The organizations also wrote: "We strongly urge the Federal Reserve to remove language that allows for the consideration of fees paid by AMCs when adhering to the first presumption of compliance with the customary and reasonable fee regulations."

    Appraisers have complained that with the growth of appraisal management companies since the Home Valuation Code of Conduct's implementation in May 2009, they have experienced sharply reduced fees from AMCs. The Dodd-Frank Act called for "customary and reasonable" fees that would reflect what the appraiser typically would be paid for the assignment absent the involvement of an AMC, with violations subject to severe penalties under the Truth in Lending Act. The Fed's interim final rule could be interpreted to significantly depart from the legislation's intent, the appraisal groups wrote.

    "The Federal Reserve should avoid establishing a revised IFR [interim final rule] or Final Rule that is inconsistent, or alternatively, weak, ineffective and contrary to the spirit of the Dodd-Frank Act," the appraisal organizations wrote.

    The Appraisal Institute has said that the lower fees paid by many appraisal management companies has led to appraisals being done by the least qualified and least competent appraisers. Requiring "customary and reasonable" fees, the Appraisal Institute has said, will encourage the most qualified and most competent appraisers to seek assignments from appraisal management companies, resulting in greater reliability for consumers. On a related topic, the appraisal organizations' letter stated, "We strongly believe that professional appraisal designations should be considered as one of the factors when determining a reasonable and customary fee."

    To see the appraisal organizations' letter to the Federal Reserve System's Board of Governors in full, go to: http://appraisalinstitute.org/newsadvocacy/downloads/ltrs_tstmny/2010/AI-ASFMRA-ASA-NAIFAonIFR-Final.pdf.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-  mail  to: twarner@usavingsbank.com





  • Protect Your Belongings with Self-Storage Insurance

    Posted Under: Market Conditions in Cincinnati, Property Q&A in Cincinnati, Home Insurance in Cincinnati  |  December 14, 2010 10:45 AM  |  231 views  |  1 comment

    Whether you’re in between moves or simply need the extra space, self-storage is a fantastic option for those who find they need to temporarily unload some personal belongings. To further protect your property, renters should look into and purchase storage insurance. At some facilities, it may not be an option. However, if you are not required to purchase it and think that your property is automatically safe, think again. Most times, if your property is worth seeking extra storage space for, it’s worth insuring.

    According to StorageFront.com, renters generally have three different options in terms of insurance:

    1)  Some homeowner’s or renter’s insurance may allow for additional coverage for your storage unit, however, you must check with the facility to ensure that they accept this type of coverage. When you go to rent your unit, proof of insurance will be required by the storage facility. Make sure to have that on hand.

    2)  Facilities may offer their own insurance premium ranging from $2,500 to $5,000. Although there may or may not be a deductible, rates may be higher and coverage lower compared to insuring through your homeowner’s or renter’s policy. Be sure to inquire about what types of damages are covered and if any items are excluded from the policy.

    3)  Independent self-storage insurance may be your best bet. Outside insurance companies may have a partnership with particular storage facilities, but oftentimes they operate independently. This type of insurance will insure higher-valued items and may protect against damage that other policies may not cover.

    Though prices per plan vary, insurance typically runs $8 for $2,000 coverage; $12 for $3,000 coverage; and $20 for $5,000 coverage. Some providers may even provide coverage for 50% in case of burglary. (Taking pictures of all your items in the storage unit is highly recommended. If items are damaged during a burglary, snap photos of them as well along with a broken lock or a damaged door).

    As always, it’s best to understand whatever policy you sign up for. Make sure you acquire all of the details at the time of signing so that you can be prepared and knowledgeable in the worst-case scenario that you need to put a claim in.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-  mail  to: twarner@usavingsbank.com


  • What is Home Insurance?

    Posted Under: Financing in Cincinnati, Property Q&A in Cincinnati, Home Insurance in Cincinnati  |  December 9, 2010 6:45 AM  |  254 views  |  1 comment

    A homeowners insurance policy is basically a contract you make with an insurance company. In exchange for your premium, the insurance company will pay for financial losses related to your home or your property during the period of the contract. The insurance company also agrees to pay for damages resulting from injuries or damage to other people for which you are held legally responsible. When you're searching for homeowners insurance, you'll want to shop for the type of policy that will fit your needs best, with adequate protection for your valuable possessions and supplemental coverage to protect against natural disasters that are not covered in your basic policy. If you're like most people, the owner of the mortgage of the home will require homeowners insurance.

    Types of Home Insurance

    Home insurance can be broken down into 7 basic types of plans. What differentiates them from one another are the types of circumstances they cover. The most popular plans today involve #2 and #3.

    Basic homeowners insurance covers 11 types of disasters:

    aircraft, wind/hail, explosion, riots/civil unrest, fire/lightning, vehicles, volcano eruptions, vandalism, theft, smoke, and self-damaging instances (part of building falls on itself, etc.).

    This list can be expanded to include 6 more disasters:

    falling objects, water damage (3 sub categories), snow/sleet/ice, and electrical surge damage.

    1. This is the basic homeowners insurance that covers your home and property against losses due to the 11 disasters listed above.

    2. This plan includes #1, in addition to more specific disaster circumstances: snow, falling objects (like trees), water damage (i.e. washing machine overflows, or dishwasher breaks), and electrical damage (power surge).

    3. This plan includes extended/specialty items, in addition to all of the above. The only disasters that this doesn't cover are flood, earthquake, war, and nuclear blasts.

    4. Renters insurance coverage. This type of insurance will protect your personal property for the above listed items.

    5. Complete risk coverage for the building and property.

    6. Condominium coverage. This type of policy covers personal property from the above disasters (all 17).

    7. This policy is designed for older homes with historic value. Coverage includes protection from the basic 11 disasters listed above. Under this plan, coverage is limited to repairs or cash values of the items involved. The rebuilding/replacement cost is not covered in this, because some aspects of the home (historic significance) can make these costs higher than current market value.

    There are variations that can be had with all of the above plans. There are special policies that can be used to cover mobile homes. Opposite of renters insurance, which only covers the renters property, there is landlord insurance. This covers the actual dwelling, but not the property within.

    One should consult with a qualified insurance professional prior to implementing any insurance strategies.

    If you are a tax, insurance, financial or financial planning professional receiving this newsletter, please call our office and introduce yourself to us. We are always seeking to grow our referral network and expose more service professionals to our client base.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-  mail  to: twarner@usavingsbank.com

  • Insurance: How Much Is Enough?

    Posted Under: Market Conditions in Cincinnati, Property Q&A in Cincinnati, Home Insurance in Cincinnati  |  December 8, 2010 7:47 AM  |  219 views  |  1 comment

     

     

    From mortgage protection and charitable giving to cash value accumulation and business continuation, there are as many reasons to buy life insurance, as there are types of insurance to buy. And there are twice as many excuses for not buying life insurance, as there are products on the market! Whether you're a business owner or new parent, you have your own reasons for buying insurance or rationalizing your decision not to. In either case you are not alone.

    Your lifestyle can help you identify an adequate amount of life insurance:

    If you have low housing payments, little or no debt, and no children, spouse or parents to care for, some experts suggest that you have life insurance equal to one to three times your salary. On the other hand if you have no children, parents or debt, stop reading this as when you go no one you know or care about will be impacted. Buying life insurance when you are young may mean you pay less because important factors considered in determining cost are age and health.

    As debt or mortgage costs increase and you have children or a spouse as dependents, you may need between three and seven times your salary in life insurance. You also may start to feel like you're sinking into a black hole, but remember, it's only a feeling.

    Parents with young children, significant mortgages and a spouse may need the greatest amount of life insurance protection, equivalent to at least seven to nine times their salary. You're also now sure you're in that black hole.

    Many insurance professionals use a formula to determine how much, if any, life insurance you need, you might find this simple equation helpful when determining your life insurance needs-but only if you want to be certain your loved ones will be secure no matter what. Consider buying $100,000 of life insurance for every $500 of pretax income your family would need per month. Let's say they would need $4,166 a month ($50,000 per year) to cover expenses. You would need $600,000 of insurance coverage to support them indefinitely.

    $4,122/$500 = 8.2
    8.2 x $100,000 = $820,000

    Your survivors would invest the $800,000 (usually tax free) at, say, 6 percent interest. That would generate $48,000 a year in interest before taxes. Assuming they would only use the interest and not the principal, the income would last a long, long time. An insurance, financial planning or estate planning professional can help you evaluate your specific needs. Many consumers in today’s fast paced environment are somewhat financially extended and feel as though they cannot take on another obligation such as an additional monthly premium for a life insurance policy. Never before have mortgage professionals been utilized for equity repositioning as they have been in today’s market.

    Lifestyle changes may have an impact your current life insurance plan. Have you changed your income? Have your financial responsibilities or goals changed? Your family size or make-up? Purchased a home or business? Become financially responsible for aging relatives? If so, you may need to increase your life insurance coverage.

    The purpose of this newsletter is not to give legal, insurance or tax advice. The purpose is to stimulate thought for our clients and those professionals we network with. If you are a insurance professional receiving this newsletter or know of one, please contact our office to introduce yourself and your services to us. We are always seeking to grow our referral network and expose professional services to our client base. The loan professional that has made this information available specializes in providing financial solutions for those buying, selling or refinancing real estate.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-mail  to: twarner@usavingsbank.com

  • Taxes & the Homeowner: Protesting Your Property Taxes

    Posted Under: Market Conditions in Cincinnati, Home Insurance in Cincinnati  |  December 8, 2010 7:43 AM  |  243 views  |  1 comment

    A local tax authority such as a county assessor's office or tax board is often responsible for calculating your property tax. For states that have no income tax, property taxes are a principal source of tax revenue. As a result, the state's revenue board is likely to be in charge of property taxes.

    Property tax rates cannot be arbitrarily changed. Instead, voters decide property tax rates. Perhaps the best-known example of property tax rates being decided by voters is Proposition 13, a referendum approved by California voters in 1978 to lower their property tax rates. (Housing prices in California remain among the most expensive in the nation.)

    Property taxes are often paid twice a year or can be paid pro rata as part of your monthly payment. Property taxes can be deducted from your federal tax return if you itemize your return. Your property tax is often calculated in one of two ways:

    Multiplying a flat amount by a fraction of your home's assessed value. A common method is to multiply a flat dollar amount by each $1,000 of your home's assessed value. For example, if the tax authority calculates your home's assessed value at $200,000, it would multiply an amount, say $10, by units of $1,000. In this case, the number of units is 200 and your annual property tax bill is $2,000.

    Multiplying a percentage by the total assessed value of your home. For example, if your tax board uses a rate of 0.5% of assessed value, and your home value is assessed at $150,000, your property tax bill is $750.

    Naturally, homeowners dislike hikes in either assessed values or tax rates. In part because of the unpopularity of higher property taxes, assessed values often lag behind the market values of homes. If home prices increase year after year, it's likely that assessed values eventually catch up. An unfortunate consequence of this lag effect is that homeowners get hit with high property-tax bills at times that immediately follow a strong housing market -- often when there is a downturn in the economy.

    You may be able to contest your property tax if you can produce market-value data on housing prices in your area to support your claim. You may wish to pay for a current real estate appraisal. An appraisal often uses comparable sales of homes in your area to calculate the market value of your home. If you can show that market values are lower than the assessor's estimate, you may be able to succeed in your claim. Since assessed values are publicly available information, you may find data on assessed values of similar homes to support your claim.

    This is not a manifesto on how to protest your property tax bill. Your chance of success in contesting a property tax bill is mixed at best. You may be able to persuade a local tax assessor -- a publicly elected official -- to use tax-assessment data that supports your argument. In states where the state revenue board controls property taxes, you may have to turn to the ballot process to get results (as Californians did with Proposition 13.) You may wish to organize locally and petition to add a property tax initiative to either an upcoming election or a special voter referendum.

    One should consult with a qualified taxation professional prior to implementing taxation strategies.

    If you are a tax, insurance, financial or real estate planning professional receiving this newsletter, please call our office and introduce yourself to us.  We are always seeking to grow our referral network and expose more service professionals to our client base.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-mail  to: twarner@usavingsbank.com

  • HOUSE HUNTING & INSURANCE

    Posted Under: Home Buying in Cincinnati, Home Insurance in Cincinnati  |  December 4, 2010 6:26 AM  |  209 views  |  No comments

     

     

    As you look at homes, remember that the house you want to purchase – what it is, where it is and the kind of shape it’s in -- these characteristics can send your insurance rates up or down:

    Construction of the house

    If you are buying in a seismically-active region, look for newer homes built to current codes, or older homes that have been bolted to their foundations. They are better able to withstand earthquakes. If you plan to live near the Atlantic or Gulf coasts, consider a brick home because it is more hurricane resistant.

    Age of the house

    Older homes sometimes have features such as plaster walls, ceiling molding and wooden floors that could be costly to replace. Such special features may raise the cost of insurance slightly. Make sure you get replacement cost coverage in your insurance policy if it is available. Also, an older home that has been updated to comply with current building codes is typically less expensive to insure than an older home that is not up to date.

    Condition of roof and home

    If you are considering a “fixer upper,” you may pay more for insurance until clear improvements are made. In particular, check out the condition of the roof. A new roof in good repair will be attractive to insurers and will save you money and aggravation.

    Plumbing, heating and electrical systems

    These systems can wear out, become unsafe with age or become dated as safer technologies are introduced. Recent upgrades make your home safer and less likely to suffer fire or water damage.

    Safety devices

    Homes equipped with smoke, fire and burglary alarm systems that ring an outside service may get sizable discounts. Strong doors, dead-bolt locks and window locks may also reduce insurance costs.

    Pool, wood-burning stove, etc.

    You will need higher property and liability coverage if you are buying a home with these features. With a pool, consider getting added protection, such as an umbrella or excess liability policy.

    Quality and proximity of the fire department

    Homes near a fire station, those with a hydrant close by and those located in communities with a professional rather than volunteer fire department will cost less to insure.

    Location, location, location

    Homes near the coast can be more expensive to insure, because of the increased risk of wind, water and hurricane damage. In many states, you will pay the first few thousand dollars in damage before your insurance kicks in. You also need to think about the threat of floods or earthquakes. You will need separate insurance for these risks and it can be costly. Also, around the country, there are high risk areas vulnerable to hurricanes, brush fires or crime that might not qualify for private insurance. To make insurance available, there are state-sponsored Fair Access to Insurance Requirement (FAIR) plans. FAIR plans, however, can be expensive and provide less coverage.

    One should consult with a qualified insurance professional prior to implementing any insurance strategies.

    If you are a tax, insurance, financial or real estate planning professional receiving this newsletter, please call our office and introduce yourself to us.  We are always seeking to grow our referral network and expose more service professionals to our client base.

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-mail  to: twarner@usavingsbank.com

  • How Much Protection Is Enough?

    Posted Under: Quality of Life in Cincinnati, Property Q&A in Cincinnati, Home Insurance in Cincinnati  |  December 4, 2010 6:16 AM  |  280 views  |  2 comments

     

    From mortgage protection and charitable giving to cash value accumulation and business continuation, there are as many reasons to buy life insurance, as there are types of insurance to buy and twice as many excuses for not buying life insurance, as there are products on the market! Whether you're a business owner or new parent, you have your own reasons for buying insurance or rationalizing your decision not to. Either way, you are not alone.  Your lifestyle can help you identify an adequate amount of life insurance:

     

    With low housing payments, little debt, and no children, spouse or parents to care for, some experts suggest that you have life insurance equal to one to three times your salary. If you have no children, parents or debt, stop reading this as when you go no one you know or care about will be impacted.  Buying life insurance when you are young may mean you pay less because important factors considered in determining cost are age and health.   As debt or mortgage costs increase and you have dependents, you may need between three and seven times your salary in life insurance. You also may start to feel like you're sinking into a black hole, but remember, it's only a feeling.   Parents with young children, significant mortgages and a spouse may need the greatest amount of life insurance protection, equivalent to at least seven to nine times their salary. You're also now sure you're in that black hole. 

     

    Many insurance professionals use a formula to determine how much, if any, life insurance you need, you might find this simple equation helpful when determining your life insurance needs-but only if you want to be certain your loved ones will be secure no matter what. Consider buying $100,000 of life insurance for every $500 of pretax income your family would need per month. Say they would need $4,166 a month ($50,000 per year) to cover expenses.

     

    You would need $600,000 of insurance coverage to support them indefinitely.

    $4,122/$500   = 8.2
    8.2 x $100,000   = $820,000

     

    Your survivors would invest the $800,000 (usually tax free) at, say, 6 percent interest. That would generate $48,000 a year in interest before taxes. Assuming they would only use the interest, not the principal, the income would last a long time.    An insurance, financial planning or estate planning professional can help you evaluate your specific needs. 

     

    Many in today’s fast paced environment are somewhat financially extended and feel as though they cannot take on another obligation such as an additional monthly premium for a life insurance policy.  Never before have mortgage professionals been utilized for equity repositioning as they have been in today’s market. 

     

    Lifestyle changes may have impact your current life insurance plan. Has your income changed? Your financial responsibilities or goals? Your family size or make-up? Purchased a home or business? Become financially responsible for aging relatives?  If so, you may need to increase your life insurance coverage.  The purpose of this newsletter is not to give legal, insurance or tax advice.

     

     The purpose is to stimulate thought for our clients and those professionals we network with. If you are a family planning, legal or insurance professional receiving this newsletter or know of one, please contact our office to introduce yourself and your services to us. We are always seeking to grow our referral network and expose professional services to our client base. The loan professional that has made this information available specializes in providing financial solutions for those buying, selling or refinancing real estate.

     

    The Veterans Group at Union Savings welcomes your questions and comments. Send your e-mail  to: twarner@usavingsbank.com

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