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New issue for homeowners: Inflated appraisals

As the housing market cools, Americans are confronting a problem that was easy to ignore during the boom: Inflated appraisals of home values.

Critics inside and outside the appraisal business have long warned that many appraisals are unrealistically high. That's partly because generous appraisals help loan officers and mortgage brokers, who often choose the appraiser, complete more deals. If a home is appraised at less than the buyer offered, the deal is likely to fall through.

Inflated appraisals didn't matter much when home prices were rising at double-digit rates, since market values would quickly catch up. Now, however, prices are leveling off in many places and falling in some. Some homeowners are finding that the market value is below what past appraisals led them to believe.

JD Power and Associates Reports: USAA Ranks Highest in Customer ...

WESTLAKE VILLAGE, Calif., July 19 /PRNewswire/ -- USAA Federal Savings Bank ranks highest in customer satisfaction with the servicing of mortgages, according to the J.D. Power and Associates 2006 Primary Mortgage Servicer Study(SM) released today.

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The study measures customer service with the process of servicing a loan based on four primary areas: the administration of the customer's account; the billing process; the payment process; and the process of contacting the mortgage servicer (if necessary).

USAA Federal Savings Bank(1) receives an overall customer satisfaction index score of 897, based on a 1,000-point scale, recording the highest ratings in each of the four factors by a wide margin. BB&T (861) and Citizens Bank (844) follow USAA in the rankings.

Thursday Newspaper Review - Irish Business News and International ...

The Irish Independent reports that thousands of homeowners will be left struggling to cope with crippling mortgage repayments as interest rates climb even further today.

The European Central Bank will today announce a further rise in interest rates - the fourth 0.25pc increase in just eight months.

The combined increases means mortgage holders will have to repay an average of 2,000 extra per annum - or 60,000 over the lifetime of a 30-year loan. This latest increase will result in a total 12pc jump in the cost of monthly repayments in just eight months.

Bank of Ireland Chief Economist Dan McLaughlin has also warned of two further rises in October and December, pushing the base rate to 3.5pc.

Debt

The Money Advice and Budgeting Service (MABS) last night warned many young buyers, who are already stretched to their limits, will be forced to remortgage to longer terms or turn to debt consolidation.

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