Issues With Flood Plains

February 11th, 2013 No comments »

When a Broker lists a home on water or near any waterway one crucial area of investigation is whether it is in the flood plain. Even with a lot that is partially in the flood plain, building a structure or adding an addition to an existing structure may be restricted.

To check the status, the buyer may contact a local surveyor or the Wisconsin Department of Natural Resources (DNR) for more information.

It is important to determine if a property is in the flood plain because if it is, flood insurance will be required by the mortgage lender.

There may be some clues that tip one off to a need for further investigation.
1. There may be water marks on trees showing water stands.
2. If there are lakes, streams or rivers nearby, it must be determined what the flood elevations area and then look at the local and State ordinances governing what can be built in the 25 year or 100 year flood plain.
3. What type of soils are in the area? Can the soil support a structure?
4. Is there storm water collection system: storm water sewer or drainage ditches?
5. Where is the structure in relationship to the surrounding ground. Eg at the top of a hill or the bottom.

It is vital that the buyers, themselves, investigate.  They must think about future use of the property and if there are limitations to what they may built, or rebuilt, in case of  damage to the existing structures.

Effect of Foreclosure on Credit Score

October 23rd, 2012 No comments »

A foreclosure can reduce your credit score as much as 200 points.  As short sale is one in which the lender accepts a sales price which is less than the amount of the mortgage due.  A deed-in lieu of foreclosure occurs when the property owner deeds the property to the lender rather than making them go through the time and expense of a foreclosure.  Both the short sale and the deed-in-lieu of foreclosure will cause  drop in credit scores almost as much as a foreclosure.

The degree of effect on a person’s credit score depends on what the score is before the event, what is reported and the composition of his or her credit file.  A high credit score may be impacted more by a foreclosure than one that is lower to begin with.

It would seem prudent that a homeowner would utilize any one of these techniques as an absolute last resort and then with the understanding that any one of these could reduce their credit score by 200 points.