The Appraisal Process
When it comes to trying to figure out your home’s value, there are certainly many real estate websites that may suggest a particular value or price. Keep in mind that all of them utilize much of the same data that we would use in the appraisal process, but, they are generalizations and not specific to your property. At Fire Horse Appraisal, we will personally inspect your property (to be aware of your property’s specific qualities), we will look at current multiple listing data, as well as public records data and only after all of that work is done, we arrive at a Fair Market Value for your property. This, coupled with our experience in the field and knowledge of local real estate values, provides you with a value that you can rely on, based on the most current and appropriate data.
The appraisal process is very straight forward. When we are provided with your appraisal purpose and property data, we can then advise you as to whether you need a full appraisal or an “exterior only” appraisal. A full appraisal is more detailed and requires measuring the home with both interior and exterior inspection of your property. In many cases, an exterior only appraisal may suffice, with the inspection done solely from the exterior and with additional data supplied by you. It is less invasive and more convenient, with none of your time taken to meet for the inspection. In either case, you will receive a fully supported value for your property (the same type of appraisal as would be provided to a lender, i.e. refi, purchase, etc.), and we will include a copy of my license.
Our Appraisal Fees
Our appraisal fees are based on the time required to address the complexity of each assignment so there is no “one price that fits all.” The different kinds of appraisal are based on the reasons such an appraisal is necessary, such as estate trusts, a divorce, or a bankruptcy, each require different sets of technical requirements and documentation for acceptance in superior court, federal court, or the IRS. Because of the uniqueness of properties in Lee and Collier County it is necessary to quote each appraisal fee individually. Feel free to contact us for a free quote. We appreciate the opportunity to earn your business!
What is the ‘Dodd-Frank Wall Street Reform and Consumer Protection Act ‘
The Dodd-Frank Wall Street Reform and Consumer Protection Act is a massive piece of financial reform legislation passed by the Obama administration in 2010 as a response to the financial crisis of 2008. Named after sponsors U.S. Senator Christopher J. Dodd and U.S. Representative Barney Frank, the act’s numerous provisions, spelled out over roughly 2,300 pages, are being implemented over a period of several years and intended to decrease various risks in the U.S. financial system. The act established a number of new government agencies tasked with overseeing various components of the act and by extension various aspects of the banking system. President Donald Trump has pledged to repeal Dodd-Frank, and on May 22, 2018, the House of Representatives voted to roll back significant pieces of Dodd-Frank.
BREAKING DOWN ‘Dodd-Frank Wall Street Reform and Consumer Protection Act ‘
The Financial Stability Oversight Council and Orderly Liquidation Authority monitors the financial stability of major firms whose failure could have a major negative impact on the economy (companies deemed “too big to fail”). It also provides for liquidations or restructurings via the Orderly Liquidation Fund, which provides money to assist with the dismantling of financial companies that have been placed in receivership, and prevents tax dollars from being used to prop up such firms. The council has the authority to break up banks that are considered to be so large as to pose a systemic risk; it can also force them to increase their reserve requirements. Similarly, the new Federal Insurance Office is supposed to identify and monitor insurance companies considered “too big to fail.”
The Consumer Financial Protection Bureau (CFPB) is supposed to prevent predatory mortgage lending (reflecting the widespread sentiment that the subprime mortgage market was the underlying cause of the 2008 catastrophe) and make it easier for consumers to understand the terms of a mortgage before finalizing the paperwork. It prevents mortgage brokers from earning higher commissions for closing loans with higher fees and/or higher interest rates, and says that mortgage originators cannot steer potential borrowers to the loan that will result in the highest payment for the originator.
The CFPB also governs other types of consumer lending, including credit and debit cards, and addresses consumer complaints. It requires lenders, excluding automobile lenders, to disclose information in a form that is easy for consumers to read and understand; an example is the simplified terms you’ll find on credit card applications.
Components of the Dodd-Frank Wall Street Reform and Consumer Protection Act
A key component of Dodd-Frank, the Volcker Rule (Title VI of the Act), restricts the ways banks can invest, limiting speculative trading and eliminating proprietary trading. Effectively separating the investment and commercial functions of a bank, the Volcker Rule strongly curtails an institution’s ability to employ risk-on trading techniques and strategies when also servicing clients as a depository. Banks are not allowed to be involved with hedge funds or private equity firms, as these kinds of businesses are considered too risky. In an effort to minimize possible conflict of interests, financial firms are not allowed to trade proprietarily without sufficient “skin in the game.” The Volcker Rule is clearly a push back in the direction of the Glass-Steagall Act of 1933 – a law that first recognized the inherent dangers of financial entities extending commercial and investment banking services at the same time.
The act also contains a provision for regulating derivatives such as the credit default swaps that were widely blamed for contributing to the 2008 financial crisis. Because these exotic financial derivatives were traded over the counter, as opposed to centralized exchanges as stocks and commodities are, many were unaware of the size of their market and the risk they posed to the greater economy.
Dodd-Frank set up centralized exchanges for swaps trading to reduce the possibility of counterparty default and also required greater disclosure of swaps trading information to the public to increase transparency in those markets. The Volcker Rule also regulates financial firms’ use of derivatives in an attempt to prevent “too-big-to-fail” institutions from taking large risks that might wreak havoc on the broader economy.
Dodd-Frank also established the SEC Office of Credit Ratings, since credit rating agencies were accused of giving misleadingly favorable investment ratings that contributed to the financial crisis. The office is tasked with ensuring that agencies improve their accuracy and provide meaningful and reliable credit ratings of the businesses, municipalities and other entities they evaluate.
Rollback of Dodd-Frank Provisions
On May 22, 2018 U.S. House of Representatives voted 258-159 in favor of a bill that will significantly rollback provisions of the Dodd-Frank Act. the bipartisan legislation called the Economic Growth, Regulatory Relief, and Consumer Protection Act will now be sent to the President for his signature. Here are some of the provisions of this bill that reverse the stance of existing financial regulations-
- Small and Regional Banks: The new bill eases Dodd-Frank regulations for small and regional banks by increasing the asset threshold for application of prudential standards, stress test requirements and mandatory risk committees.
- Large Custodial Banks: For institutions that had have custody of clients’ assets but do not function as lenders or traditional bankers, the new bill proposes lower capital requirements and leverage ratios.
- Mortgage Credit: The new bill exempts escrow requirements for residential mortgage loans held by a depository or credit union under certain conditions. The bill also directs the Federal Housing Finance Agency to set up standards for Freddie Mac and Fannie Mae to consider alternate credit scoring methods.
- Small Lenders: The bill exempts lenders with assets less than $10 billion from requirements of the Volcker rule and proposes less stringent reporting and capital norms for small lenders.
- Credit Bureaus: The bill proposes free credit security freezes for customers of credit bureaus like Equifax.