Reasons to Avoid Carrying a Second T.D.

In what city and in what year is Robert Bruss living (“Don’t Fear Foreclosure When You Are Lender,” Oct. 10)?

He tells the sellers about a “no lose” 80-10-10 sale of their home in which if they foreclose, they will get a bidder at the foreclosure sale or they can sell it again for “a second profit.”

How about the foreclosure process that can run as long as two years if his buyers declare bankruptcy and all the time he is advancing hefty payments on the the first? What if the buyers destroy the house? How about the fun of forcibly evicting them from the premises? How about the market conditions indicating the house will be worth less the next time around?

How about the seller doing the intelligent thing and getting a buyer who can cash him out either by putting 20% down or getting a 90% loan, if he can qualify, from an institutional lender?

IRENE PARIS

Beverly Hills

The writer is a real estate broker.

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Regarding “Don’t Fear Foreclosure When You Are Lender”: The answer was so dangerously wrong that I felt compelled to write.

My advice: Do not carry a second if you must rely on the payments to live on.

If you own a second you must be prepared to go for as long as two years without receiving any payments (if your borrower becomes delinquent and files for bankruptcy)--and only at the end of that time period to receive your money, if at all. Also, you must be prepared to pay off the underlying first-trust deed note holder in full.

Most debtors are honorable people who pay their debts, and, accordingly, most seconds are paid without incident. But we are in a difficult period in our economy. What starts off as the best of intentions does not always end up that way. The truth is that owning a second in today’s economic climate has the potential for becoming a note holder’s worst nightmare. My advice on owning seconds is: “Don’t!”

ALBERT U. PRAGER

Coronado

The writer is an attorney.

Great Library, but Those Chandeliers . . .

It was a thrill to attend the reopening of the Central Library. My grandfather, Bertram G. Goodhue, was the architect of the original building.

The grandeur and sweep of the atrium of the new wing is most impressive, and Norman Pfeiffer, the architect for the addition, must be very proud of his work.

Pfeiffer has attempted to blend the new with the old, to maintain the sense of greatness that the building has held for many years. He has added many fine new portions to the building, such as the handsome Mark Taper Auditorium, while preserving the integrity of the original.

But it is a shame that this grand new wing is so marred by the hideous chandeliers, which are incongruous with everything Pfeiffer and Goodhue worked for. The close collaboration and blending of the work of painter, sculptor and architect was at the heart of my grandfather’s philosophy, but here we have a clash of dignity and grandeur with silliness and gaudiness.

Perhaps these monstrosities would be appropriate in some other setting, but it is incomprehensible to me that the new atrium of the Central Library could be considered such a place. I have similar views of the painted ceiling in another room.

Why wasn’t work selected that was designed to be part of the overall plan, rather than as a shocking contrast to the rest of the building?

YATES SATTERLEE

Santa Barbara

Survey Cost Right Out of the 1950s

“Defining Fees Sometimes Associated With Home Loans” (Oct. 17) lists quite a few different fees that may be required to acquire a home loan. One of those costs was a survey cost. Your article says that the average fee is $125 to $300. Whoever wrote this article must have been living in the 1950s!

Today’s survey costs are $167 an hour for a two-man crew. A crew comes equipped with about $30,000 to $50,000 worth of equipment. Prior to sending a survey crew to the actual site, the land surveyor must perform research at the county hall of records, the county engineer, the city surveyor and/or the city offices. This research is then analyzed and prepared for the field survey crew. Once at the site, the survey crew will look for survey markers in the ground, which control the various boundary locations throughout the particular neighborhood. Once the controlling markers are found, the surveyor must make measurements, to compare what is actually on the ground with what the various maps say. In California, the monuments on the ground control property limits, not the dimensions on the maps.

The surveyor must then decide what to do with any excess or shortage of land that he or she may find in the neighborhood. The surveyor is finally ready to mark off (stake) the particular piece of land. Once the field measurements are made and the markers are in place, the information is brought back to the surveyor’s office, where it is reanalyzed and double-checked for accuracy.

For this amount of work, the typical fee is in the range of $1,000 and up. Hillside lots can be quite a bit more.

L. PAUL COOK

President, C.W. Cook Co., Los Angeles

Roof Photo Is Cause for Safety Concern

The top photo accompanying the “Home Makers” story (Oct. 10) shows gang nail-type trusses with inadequate bracing to safely carry the weight of the two women walking on the bottom chord of the trusses.

There have been numerous failures of the trusses due to lateral buckling of the top chord when two or more persons were walking on the bottom chord of one of these trusses at the same time. Some injuries have resulted in permanent disability to the parties involved. People’s Self-Help Housing Corp., a nonprofit developer, may become a nonexistent group without guidance as to safe working conditions at the job site.

ROBERT M. POWELL

President; Powell, Mika & Associates, Consulting Engineers; Encino

Many Added Expenses When Refinancing

With the resurgence of low interest rates, homeowners with high mortgage payments should find refinancing a relief.

As a homeowner who has paid a $1,498 mortgage religiously over the years I decided to refinance using the lenders no-cost program. They just basically process your papers and literally change your interest rates, do some prorations and bingo, you get the new promised lower monthly payment.

However, beware if your property has a low appraisal because of the depressed market. It may lead you to encounter new unexpected costs.

My appraisal was a little bit low. I was told my loan-to-value ratio was 83%. For me to refinance, I have to buy mortgage insurance to guarantee that I would not default on the new mortgage payment of $1,231, plus I must pay the mortgage initiation fee of about $970. Then I would have to pay impounds. On top of that, I have to pay title insurance to guarantee that I own the property.

The lenders should look at the applicant’s paying history before asking for guarantees. And what about this title insurance premiums? I can see if the deal is a purchase; the buyer is to be protected. This is just refinancing. Why do you have to guarantee your title to the property? Isn’t a title search enough?

To top that, this is my second refinance. On my first refinance (two years ago), I was also charged huge title insurance premiums, but no mortgage insurance then.

RENE SANTOS

Carson

Pluses of Appraisal in Finding Home Value

This letter is in response to Robert Bruss’ column of Oct. 3. Specific reference is to the question (“Comparables More Useful Than Appraisal”) regarding the party who is considering putting their house on the market and hired an appraiser who gave them two values--based on replacement-cost method and comparable-sales method.

To preface my remarks, let me say that I have been a real estate appraiser for more than 30 years and have my own appraisal company in Orange County.

Bruss comments: “Most real estate agents are in better touch with the current marketplace than are professional appraisers, who make appraisals based on past real estate activity.” He then recommends that the party seek a competitive market analysis (CMA) from three agents.

Bruss is apparently unaware that many lending institutions that hire appraisers require that current listings become a part of the appraisal report along with closed, recorded sales not over six months old.

At the very least, even though the lender may not require it, most good appraisers, in this declining market, will check current listings in the immediate neighborhood. This will accomplish two things--verify that the recorded sales are still realistic and reflect the top of the range for the subject neighborhood. If there is evidence of depreciation based on the time difference between the “comp” and the listing, the appraiser will indicate it in his remarks and reflect it in the final value. Note that many appraisers have access to MLS (Multiple Listing Service) data.

The problem with the CMA, which Bruss does not address, is that generally the information is very sketchy, gives only general trends in the neighborhood and reaches no valid conclusions as to value for the subject. On the other hand, the well-researched appraisal report will give a detailed analysis of each comparable in relation to the subject property and a final conclusion of value.

HERB ROBINSON

Tustin

Uncle Sam ‘Statue Item’ Violates Rules

On Sept. 8, the Northwood Square Townhomes Assn. in Irvine informed me that a display I have is “in violation of the association governing documents and rules and regulations” because “installed wind chimes and other statue items in the area around your patio, front door and front unit area” are evidently a no-no.

The “statue item” is a 23-inch-high replica of Uncle Sam holding the flag of this country.

I find it very upsetting that a board of directors and/or association manager of an insignificant grease spot on the map of California can tell me, a resident of this country, that I cannot display the flag because it is in violation of the CC&Rs; (covenants, conditions & restrictions). We are not talking about “flying” the flag. There are weeds in yards near mine that are higher and more easily noticed than this “statue item.”

To tell any American they cannot display the flag of their country is a bit like the “Twilight Zone.” Only this is reality where I live.

TRISHA ROBERTS

Irvine