Towson Real Estate Agent

Wells Fargo HELOC Class Action Lawsuit

A Class Action Lawsuit has been filed against Wells Fargo due to reductions in HELOCs all over the country.

In May of 2009, I wrote about Towson Zillow Zestimates affecting a client’s HELOC loan, and how his line of credit had been reduced right in the middle of construction on the property. This is what happened three years ago:

Last week I had a client call me because his HELOC was reduced by a large amount right in the middle of construction to improve his home. He could not understand how the bank could make the determination that his Towson house value had dropped over $200,000 in the past 18 months since he opened his HELOC.

Upon speaking to the bank, the representative pulls up Zillow, and proceeds to tell him this is how they discovered the value change.

“Is this true? Has my value really dropped by THIS much? I knew we were in a depressed market, but did not think it was THIS bad,” he asked me.

Based on a true market analysis, his value has really only dropped by $25-50,000.

Well, it turns out my client was not alone in what happened. In looking at the Wells Fargo HELOC Class Action Lawsuit document he shared with me, it appears there were a large number of people affected by this seemingly arbitrary reduction in loan amount.

If you had a HELOC loan with Wells Fargo in the time period from July 1, 2008-June 30, 2011 and had it reduced, you may be eligible to be a part of the lawsuit.

To become a part of the settlement, you will want to visit helocsettlement.com to learn more. If you want to opt out of the settlement, you will need to notify in writing through a Request for Exclusion by April 5, 2012. All details should be at helocsettlement.com. The attorneys handling the lawsuit are with Edelson McGuire LLC, 350 North LaSalle, Suite 1300, Chicago, IL, 60654. You may want to contact an attorney if you would like to know your specific rights.

Wells Fargo is not admitting any wrongdoing, but have agreed to settle in order to avoid going to court over the lawsuit.

I am glad for my clients, as they may have at least part of their HELOC reinstated. Let’s hope also that other banks learn from this and will not use Zillow Zestimates or other automated valuation systems to determine value on a home, without the option of a full appraisal.

Towson Y and West Towson House Values

The Towson Y is located between Chesapeake Avenue and Allegheny Avenue in Towson.

It has been there for many years, and they are looking to expand and build upon their current space.

The issue is that the new building is due to be placed where the tennis courts are — and that backs up to West Towson homes on Allegheny Avenue.

The tennis courts have chain link around and is fairly open, which does not bother the neighbors much on Allegheny. Their concern, according to an article in the Towson Patch, is that the new building will be tall & concrete — and very visible to their West Towson homes, especially in the fall and winter, when the leaves on the trees that separate the two are not there.

In addition to the size and proximity of the new structure, another concern is environmental. Will there be runoff onto the neighboring properties? Could it affect wildlife?

The Towson Y has responded and says there will be stormwater management systems in place, and is also planning to change the design a bit to work with their West Towson neighbors.

I will be interested to see the adjusted design and hear how the neighbors feel about how it will look. Hopefully the Y and the community can come up with a solution that will bring a vibrant and useful activity filled place to the area, yet also not potentially affect their neighbors’ West Towson house values.

Towson Swim Club Will Not Happen

The Towson Swim Club that had been planned for the old Towson jail has now been canceled due to lack of interest in charter memberships from the surrounding community.

Two paragraphs appear on the website:

“On Tuesday, March 6th, the founding members of the Towson Swim Club voted to terminate the swimming pool project.

We would like to thank all of you who believed in the project and wanted to see a neighborhood pool in Towson.”

Though it is disappointing, it is not too surprising, considering the state of the economy, and the up front expense the charter memberships required. The cost, according to the paperwork from their website, had been $1,975 per household plus $250 application fee and $275 initiation fee. Summer fees ranged from $495 individual memberships to $685 family memberships.

The Towson Patch reported on the project termination, stating that Josh Gilkin, a member of the swim board said,

“Members who had already signed up will get all of their money back at a later date, Glikin said, though the details have not yet been worked out as the swim club closes its financial books.”

At the end of January, the Towson Swim Club stated that they needed to get an additional 135 members by February 29 or the project would be ended. In that time period, they only got  between 35-40 new members, totaling between 225-230, much less than the 315 needed to open.

At this point, it has not been determined what will happen with the site, and any possible development or use. There are still a number of wonderful pools not too far away for West Towson residents to enjoy!

Towson Hot Bagels in Timonium

Towson Hot Bagels is going in the Yorkridge Shopping Center in Timonium.

It is great to see another vacant space filled in that Lutherville shopping center. Golfsmith is going in where the old Borders Bookstore used to reside, and this is where Cosmo Prof Salon Supply and the closed Mailbox Etc were located.

Mom’s Organic Market has been a great addition to the shopping center, and is in the same vicinity as the new Towson Hot Bagels.

Towson Hot Bagels is a popular eatery in Towson on Allegheny Avenue with bagels (surprise!), sandwiches, and salads. Despite its’ close proximity to where I live in Towson, I have only been there once.

Their expansion into Timonium is a welcome addition (especially to those of us whose Timonium real estate office is right behind there!)

I am particularly excited about the salt bagel they carry, which most bagel places do not make. I have found the one place currently near my office that does puts a bit too much on…and rumor has it THB has the best. I’ll let you know after they open!

As usual, this is not a paid endorsement, and I do not have a financial interest in THB. I like to stay on top of changes and additions since I sell homes in Timonium and my office is here too!

This Month in Real Estate March 2012

This Month in Real Estate March 2012 has been released!

Home sales activity remained steady at a pace of 4.6 million to be sold by the end of the year. The median home price dropped $10,000 from last month to $155,000. The average interest rate dropped slightly to 3.87% down from 3.88% as per This Month in Real Estate February 2012.

The top story, as presented by Jay Papasan, is that almost half of home sellers who priced their homes for sale according to the range given to them by their professional real estate agent sold quicker and for more money than those who did not.

In News You Can Use, Byron Ellington discusses pricing high to “test the waters” of the market.

The problem with that theory is that yes, the seller will sell a house — it just most likely won’t be theirs. If there are lower priced comparable houses in the neighborhood, a buyer will most likely look at your house and see what a deal the house down the street is.

The first few weeks on the market are the most important, and where sellers generally get the best offers, if they are priced correctly. If they are priced too high, they won’t get offers, and their home will become stale on the market.

With the thought that buyers can always make an offer, that it very true. But if it is priced well, they are more likely to make the offer on THAT house.

For more information on your Towson house value, please contact me. I would be happy to help!

Maryland Senate Passes Ground Rent Bill

The Maryland Senate passed a ground rent bill yesterday that would require the owners of ground rents to register them before they would be allowed to collect the money from them.

This was in response to the ground rent registration law that was overturned last year, where if the ground rent were not registered by a certain date, the rent would be extinguished. Ground rent owners who had not been aware of the registration fought and won that battle, where a court found that to be unconstitutional.

A seemingly reasonable compromise is this law, which doesn’t extinguish any ground rents, that says rent cannot be collected until the ground rent is registered. Once registered, the ground rent owner has the right to collect three years’ back rent, but it cannot make claims other than that if the property were not registered before.

The Baltimore Sun reported on this bill once it was passed, and says a similar bill is in the House of Delegates, which the government is hoping helps to solve some of the ground rent issues at hand.

The issue it doesn’t resolve is when someone wants to change the property from ground rent to fee simple, and the ground rent owner cannot be identified. The one thing that the law that was overturned would have done is make those ground rents that haven’t been paid in years because no one can find the rightful owner go away. They are a big problem for many out of state mortgage companies, and therefore the title companies who are doing the research and witholdings.

There are not many mortgage companies from out of state understand leasehold properties or the history of ground rent in Baltimore, and ground rents do affect a home’s value, whether or not there is a mortgage. Two years ago, FHA changed the way that ground rent properties are appraised, so there is that part of ground rent confusion and concern as well.

The main thing for a homeowner with ground rent to know is that even if you don’t “own the ground,” like many properties in Rodgers Forge, Loch Raven Village, and Downtown Baltimore, you can still use it any way that you want or desire (according to the covenants and restrictions of the neighborhood,) as long as you pay your ground rent.

Luckily this bill, if passed by the House of Delegates, can help to ensure that only three years’ back rent can be collected, and only if the property is registered, so it doesn’t leave homeowners in a bad position if they did not know who the owner was, and therefore had not made prior payments.

For more information on Baltimore ground rent homes and how ground rent can affect you as a homeowner, contact me. I would be happy to help!

Towson Green Houses

Towson Green houses are very neat, as I saw first hand at a Broker’s Open house on Tuesday, February 21, 2012.

Bozzuto is the builder for the townhouses, and we got a sneak peek at the models before their official grand opening in mid March.

I took a lot of photos to share!

For more details about the houses and floorplans, read my other post on Towson Green. Meanwhile, enjoy the photos!

Contact me for more details or to buy a Towson Green home!

Wiring Funds for Settlement

Due to the economy and fraudulent transactions, many title companies here in Maryland are requiring buyers to wire their funds for settlement, instead of bringing a cashier’s check, which used to be the norm.

Apparently there are fake cashier’s checks circulating, which puts the title company in very bad position.

A title company relies on the money from the cashier’s check or wire in order to pay off many things. The seller is due their funds, if they are receiving any, and the title company writes that check.

The title company has to pay off the seller’s mortgage, if they have one.

There are County and State fees that the title company also pays.

If there is a cashier’s check that was supposed to cover most of that amount, and it is not valid money, then they are left with a huge debt that they have to collect, either directly or through court.

Though it is not certain how these cashier’s checks have been created, there have been enough of them that policies have been changed.

Alison Noger of North American Title in Towson wrote a post for me last year about why it is a good idea to wire funds to a title company in a Baltimore real estate transaction. Now company policy requires a wire over a certain amount of money, as many Baltimore title companies are doing.

So, Baltimore homebuyers, please understand if your title company requires a wire transfer for the money you need to bring to settlement. It is for your protection as well.

For more information about buying a home in Baltimore, please contact me! I’d love to help!

Baltimore Zillow Zestimates Still Off

Baltimore Zillow Zestimates are still often off from true value, despite the change in algorithms last year.

“Desktop Valuations” are a quick way to look at the potential value of a home, but they do not take many factors into consideration, and some of the things they DO use to determine a value should not be used!

I answer questions on the Zillow site, and so many times the questions come from a place of, “Why, in my townhouse community where the houses are very much the same, is my neighbor’s worth $XXX and mine is worth $45,000 less despite mine being an end unit with an additional bump-out?”

That is a very good question, and one that doesn’t have a good answer. The algorithm takes into account the taxes you pay and when the house last changed hands. If a house hasn’t changed hands in some time, the taxes generally are lower, and that would bring the “value” of that house down. That just doesn’t seem right, does it?

Next to this is an example of the “range” of value for one house I found. If a professional real estate agent walked into your house and told you they thought it might sell for somewhere between $391,000 and $740,000, would you feel comfortable that the agent knew your market?

How about the houses “for sale nearby.” Do these look like they belong together as a picture of a particular Towson community to you? They seem to be a random selection of homes that happen to be in the same zip code.

 

 

The biggest issue is the quality of the Baltimore Zestimates.

As you can see here, Baltimore Zestimates are within 5% of an actual sales price only 42.6% of the time. They are within 10% of an actual sales price 66.4% of the time. They are within 20% of a sales price 83% of the time. These are with a median error of 6.1%.

Think about what that means.

On a $400,000 sales price, the Zestimate may show $380,000 or $420,000 — but again, that is only 42.6% of the time.

To get above 50%, you have to go within 10% of the actual sales price. So on that same $400,000 house, a Zestimate 66.4% of the time will be from $360,000-440,000.

To get to the closer 83%, you have to bring that out to 20% of a sales price. That could drop the Zestimate down to $320,000. Would you as a Baltimore seller be happy with that if your house were truly worth $400,000? How about a homebuyer? Would a Baltimore homebuyer be happy to pay $480,000 for a house that is really worth $400,000? Probably not. And the buyer’s mortgage company most likely wouldn’t let it happen, because an actual appraisal would most likely be close to the true market value of $400,000.

And don’t forget — that is with a median error of 6.1%, or approximately $24,000 give-or-take, on that $400,000 house.

Real estate everywhere is LOCAL. Hyper-local even.

Baltimore real estate values can be different street-by-street!

For a true understanding of your house’s value, don’t count on automated valuation websites. Contact me for a true idea of you Baltimore house value. I’d love to help!

 

Would you like to know more and see additional Zillow issues in the Baltimore area? See my past posts on incorrect Towson Zillow Zestimates for details.

Towson Circle Movie Theater Development

The Towson Circle III is a development potentially in the works for the heart of Towson with shops, eateries, and a large Cinemark Movie Theater.

The development is being put together by Heritage Properties of Towson and leasing will be done by The Cordish Companies.

Towson Circle III would be located on the 4.2 acre lot at the corner of East Joppa, Virginia, and Pennsylvania Avenues. There is currently a building there and the now-closed Burger King also sits on the lot. Here is how it looks today:

 

 

 

 

 

 

Not only will there be things to do and places to eat, there will be a 862 space parking garage to handle the expected large volume of cars.

Here is a draft of plans from the Greater Towson Council of Community Associations.

So far, according to Cordish, five bistro-type eateries have already agreed to move into the space. There will be some chain restaurants, as well as individually owned & operated ones.

This could be a great way to rebuild that area of Downtown Towson that is currently wasted space. Hopefully this will be a good & successful fit!

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