Archive for the ‘Valuation’ Category
Two new videos
I’ll be the first to admit that I have a “face for radio”, but the good folks at LexisNexis posted a pair of videos of me from the big June “Gulf Oil Spill Litigation Conference” held in Atlanta:
Remediation after the oil spill
Bank losses after the oil spill
Enjoy!
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gulfspillvaluations.com
We’ve been hinting at this for weeks….
www.gulfspillvaluations.com is finally alive! This is our web-based solution to providing valuations for thousands of Gulf Coast homeowners who need documentation for their property value diminution claims resulting from the Gulf Oil Spill.
The “official” announcement hit today. CNBC had a great piece on it (click here for a link) and there are already several great pieces about it on the web.
I’ll keep you posted as this progresses.
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Collateral Risk Network
Great talk Wednesday at the Collateral Risk Network conference in DC. One-hundred or so in attendance, representing a great cross-section of stakeholders in mortgage collateral valuation, including some very senior folks from most of the Federal regulators. I spoke for an hour on the impacts of the Gulf Oil Spill on loan portfolios (current and future) in the affected region.
The news, by the way, isn’t very good. For starters, the property value losses are in the billions. While much of this will be compensable to the property owners, little is being done to the holders of the mortgages (banks, mostly). For example, assume a waterfront property in Louisiana valued at $500,000 before the oil spill. Today, it’s worth half that — $250,000. The property owner turns in a claim (which may be paid, or more likely at that level will need to be litigated). Even if the claim is paid, the property is still worth only $250,000. Now, what if before the spill event, the owner had taken out an 80% loan — $400,000. The bank is now sitting on a $400,000 loan collateralized by a $250,000 property.
In most circumstances, the property owners will continue to make payments, and the loans will be paid in full. However, if history tells us anything, a significant number of these loans will end up badly.
In the immediate, the lenders in the area are basically frozen. Anecdotal evidence coming in from the region indicates lenders are not lending, and even existing loan commitments are being cancelled. This has wide-ranging economic problems, not just for borrowers and lenders, but secondarily for a whole host of market participants (builders and brokers near the top of that list).
On that theme, I’m headed for Louisiana in a few days, with meeting scheduled on a variety of issues (some of them, oil spill related). As usual, I’ll keep you all posted.
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weekend update…
Do I need to pay royalties to SNL for using that title?
Anyway, I’m headed for D.C. (among other places) this week, speaking at the meetings of the Collateral Risk Network (Hamilton Crowne Plaza, 14th @ K Street) on Wednesday. CRN is principally made up of bank lending regulators, appraisal reviewers, and others in the real estate collateral business. The primary focus of this meeting is on new appraisal regulations coming out of the recent housing finance melt-down. As a secondary issue, I’ve been asked to speak on the Gulf Oil Spill and its impact on lending, property values, and appraisals in that region.
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It’s been a busy month!
Actually, busy with personal stuff. Three weddings so far this summer, and one more to go! Most significantly — my son and new daughter-in-law got married this month! Big public congratulations to Jonathan and Sarah!
But, back to business — it’s being called the “Unknown Oil Spill“, but a pipeline leak this week in Kalamazoo, MI, has already become the biggest oil leak in the history of the midwestern U.S. An estimated 840,000 gallons have spilled since Monday. The oil slick now stretches some 16 miles near Battle Creek, in a river that eventually flows into the great lakes. We’ll keep you posted, and I’d be very surprised if we’re not eventually involved in this.
In OTHER news, I was honored yesterday to be invited to be the keynote speaker for October’s Brownfields Conference, sponsored by the Northwest Environmental Business Council. The meetings are scheduled for October 7 & 8 in Tacoma, Washington. Afterwards, we’ll post the text of my talk on our web site.
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A couple of updates
Really three things…
First, we’re sending out a press release aimed to media outlets in the Gulf region (as well as to our clients and friends) announcing a new initiative re: the oil spill damages. Greenfield is “accumulating” a data base of every property in the affected portions of the 5-state region, including two data sets: a GIS/cartography set and a property characteristics set. This will, when completed, be the most thorough data base line for damage assessment available for this region.
Second, I’m addressing appraisers and bankers on Gulf Oil Spill issues in my first-ever “web-in-ar” sponsored by appraisalbuzz.com on July 14. I’ll let you know how this turns out!
Finally, the June issue of our newsletter, The Greenfield Advisor, is available for download as a .pdf. You can access it here.
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Gulf Oil Spill Conference
Congrats to the folks at HB Litigation Conferences for a superbly organized and run conference in Atlanta this past week. For two days, a veritable who’s who of top litigators outlined the issues, the scope of the problem, and the direction all of this is headed.
I had the pleasure of going on the first day, right after Michael Rozen (law partner to Ken Feinberg, who will administer the $20 Billion fund) and right before Robert Kennedy, the famed environmental attorney. Rozen presented an indepth Q&A on what is known today about the Fund, which frankly isn’t all that much. Big questions loom on whether BP can or will attempt to use the fund to offset their remediation costs, and how claimants will be compensated for ongoing economic disruption which may not be fully knowable today. Kennedy’s luncheon address was more forward looking — really focused on the opportunities to get the world off of its dependency on carbon-based fuel.
Naturally, my own talk was focused on the economic and valuation questions — both what we need to do and how we will go about doing those things. As I noted, much of our scope of work over the coming months won’t be knowable until the MDL panel reaches its conclusions, hopefully before the end of July. However, much can already be done, and needs to be accomplished aggressively before a judge is appointed so that in the initial meetings, the litigants will be able to show the judge that the valuation questions are actually answerable.
From a purely practical perspective, we came away from the conference realizing that we were probably the only firm of our kind in the country capable of taking on this project. Apparently, most of the attorneys in the room seemed to aggre with that assessment. We will keep you posted as this case progresses.
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and…. yet more on the Gulf Oil Spill
I gave a 30-minute talk yesterday in a conference-call setting to over 100 bankers and other folks in the lending industry (public policy types, regulators, etc.) sponsored by the Collateral Risk Network (CRN), a group which focuses on real estate in the bank lending setting. Thanks to our good friend, Joan Trice, the head of CRN, for getting us involved in this.
One of the CRN affiliates, FNC, is in the appraisal management business. Needless to say, the impact of the Gulf Oil Spill has an immediate and significant impact on they way they do business in the affected areas. They have established a web site with information about the crisis. Click here to access their site and blog directly,.
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Yet more on the Gulf Oil Spill
The promised white paper is still in the works — plan to finish it this weekend. Unfortunately, this project seems to be evolving in real time. Putting a “freeze frame” on it is problematic, but doable. We’ll unquestionably need to update this as the summer progresses.
Also, as many of you know, I’ve been s-l-o-w-l-y working on a book on Real Estate Litigation Valuation. It’s actually coming together a bit better now, and so I hope to have more info on that soon.
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More on BP Oil Spill
Just confirmed — I’ll be one of the speakers at the upcoming BP Oil Spill Conference in Atlanta (June 24/25). The conference is put together by HB Litigation Conferences, the successor group to Lexis/Nexis Mealey’s Conferences. I’ve spoken at their conferences before, and they do a great job (and without sounding too self-serving, they put together a great set of speakers). Other speakers will include both the plaintiff and defense bar in this case, and I’m scheduled to go on right before the luncheon key-note address by Robert F. Kennedy, Jr.
For more information about the conference, please visit HB Litigation Conference’s web site.
From a small northwestern observatory... 