The Neighborhood Stabilization Program requires that a foreclosure be purchased for 15 percent below market value. This requirement has caused concern among some that the discount requirement will result in a steeper decline in housing prices and further destabilization. In many cases, there is not a place to record the discount so appraisers, often rely on MLS data or data from local property taxation departments, may never know these transactions are discounted.
The folks at the Greater Baltimore Board of REALTORS® are actively addressing this issue by working with their Department of Assessment and Taxation to code transactions using NSP funds as “not arms length” on the assessment record. This helps ensure that appraisers have the most accurate information on homes when they perform valuations.
Appraisers, local governments, and REALTORS® should be working together in a similar fashion across the country to solve what many believe is the most troublesome aspect of the Neighborhood Stabilization Program.
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