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									Office of Loan Programs

Winter/Spring 2006

Issue 25

In This Issue
♦ ♦ ♦ ♦ Real Estate Appraisal Overview Wells Fargo Bank Affinity Lending Agreement View My Loan Website is Now Live! Question of the Quarter: Should I send the University a copy of my current Homeowners Insurance policy every year?

From the Director's Desk
s of February 1st, the MOP Standard Rate increased modestly from 3.95% to 4.05%, marking the fifth consecutive quarterly increase since the rate reached its all-time low of 3.60% in mid2004. Given the recent and predicted future increases in the Federal Funds rate as well as the lagging nature of the MOP rate index, we can anticipate facing continuing rate increases over the next year. Even with this upward trend in rates, the MOP interest rate is very competitive with the rates currently available through the conventional market. Coupled with the no lender fee structure and the very favorable underwriting terms, the MOP loan remains a valuable recruitment and retention tool. As of the end of February, 151 MOP loans had been funded in an aggregate dollar amount of $86.6 million for an average loan amount of $573,300 (up from the $471,000 average in the previous fiscal year). Additionally, 30 SHLP loans had been funded in an aggregate dollar amount of $3.7 million for an average loan amount of $122,830. As of the end of February, a total of 3,533 loans aggregating to $1.18 billion had been funded or committed, representing 65.9% of the total of $1.8 billion allocated to the program since July 1984. There are some indications that the ongoing sharp increases in home prices may be slowing as we continue into the current year. Even if the rate of increase slows, many of our faculty and other employees face historically high purchase prices, which have greatly outpaced the growth in incomes over the past several years. A slow down or even a halt in price increases would be a welcome event from the perspective of those employees entering the California housing market for the first time. Let’s also hope that we see a “soft landing”, as is the prediction of most experts and not a significant downturn in prices. Only time will tell… -- Steve Mathews


In Every Issue
♦ ♦ From the Director’s Desk Notes of Appreciation

Other Links of Interest
♦ ♦ ♦ ♦ University of California and Other Home Financing Links Weather in California Moving Information Insurance Rating Information

MOP Interest Rate:

August 2006 – October 2006
For Historical MOP Rate Information, visit To compare our MOP Rate with conventional mortgage rates, visit For more information about our Products and Services, visit our home page at Office of Loan Programs University of California, Office of the President 1111 Franklin Street, 6th Floor Oakland CA 94607-5200 510-987-9000 Phone 510-287-3892 Fax Office Hours: 8am – 5pm, Monday - Friday

Do you have a topic you would like to see covered in OLP Net News? E-mail us at

Winter/Spring 2006 - OLP Net News


Real Estate Appraisal Overview


ll lenders, including the University, require an independent third party evaluation of a property’s value. These valuations, or appraisals, confirm to the lender that the property is being sold for its fair market value. The fair market value is defined as the price the property would sell for in an open market, with both buyer and seller acting prudently and knowledgeably. An appraisal is far more detailed than a Market Analysis which is typically produced by a real estate agent’s evaluation of recent property sales in the neighborhood. As appraisers have no interest (financial or otherwise) in the successful completion of the transaction, they are able to provide an independent evaluation of the property. The University has compiled a list of Approved Appraisers – independent contractors who have completed our screening process. Almost all of the appraisers on our Approved list have extensive experience working with the University. An appraisal report will detail the subject property and compare features to at least three recently sold properties in the immediate area. In addition, the report will provide an overview of the overall real estate market

in the area, identify any parts of the property that detract from the value (e.g. poor layout, street noise, etc), detail the average sales time and identify any seller concessions. Most importantly, of course, the appraisal provides a value. The appraiser accomplishes this by combining two methodologies: sales comparison and cost approach. As noted above, at least three recently sold properties in the immediate area of the subject property are identified and compared. The appraiser will add or subtract value based on different aspects of the subject property in relation to each of the three comparables (for example, extra bedroom, superior view, larger lot size). After this calculation, the appraisal indicates what each of the reviewed properties would have sold for if it was exactly comparable to the subject. The cost approach calculates what it would take to duplicate the subject property if it was being recreated today. Although most useful for new properties where the costs are known, this approach also determines a value that is useful for the lender. Occasionally, the appraisal will calculate a value less than the sales price. (continued on page 3)

Wells Fargo Bank Affinity Lending Agreement

View My Loan Website is Now Live!


he University of California has an on-going mortgage lending relationship with Wells Fargo Bank. The Wells Fargo Employee Mortgage Program is available to University employees and retirees, and their immediate family members. The Program offers discounted loan application fees on loans, and can be used for purchasing a first or second home, construction financing, refinancing, or tapping into home equity using a secondary loan or a line of credit. Wells Fargo offers a wide variety of mortgage loan products. Additionally, Wells Fargo offers membership banking financial services to University of California employees. If you have questions concerning the mortgage program, you can call Wells Fargo’s UC-exclusive toll free number at 1-877-291-4331. Information concerning membership banking services, including the mortgage program, is available at -- Ruth Assily


he Office of Loan Programs (OLP) launched its new View My Loan (VML) website on February 1, 2006. VML is an online service that enables borrowers to view their loan account information 24 hours a day, seven days a week in a secure online environment. The types of information available through VML are as follows: Name(s) on Account Outstanding loan balance Current Interest Rate Current Monthly Payment Interest Paid-to-Date Interest Paid YTD Loan Funding Date Original loan balance Original Interest Rate Next Payment Change Date Next Payment Due Date Interest Paid in Prior Year

With VML, borrowers have the ability to view, print or email an account summary statement. To register for VML access, borrowers should click on the View My Loan link on OLP’s homepage or go directly to -- Sally Hopkins


Winter/Spring 2006 - OLP Net News

(…continued from page 2) As a general rule, all lenders will lend up to a maximum specified loan-to-value (LTV) ratio, with the value being the lower of the appraised value or the sales price. For University MOP loans, the maximum LTV ratio is 85% or 90%, depending on the loan amount (plus qualified closing costs on certain loan amounts, up to a maximum LTV of 92%). If an appraised value comes in lower than the sales price, the buyers have the option to cancel the transaction, only if the purchase contract states that the purchase is contingent on the property appraising for the sales price. Another option would be to renegotiate the purchase price with the seller. If the seller is unwilling to do so, and the buyers want to proceed with the sale, the University will require the buyers to increase the amount of their down payment. The University will provide you a copy of your appraisal upon request. -- Jay Valancy

Director Steve Mathews Newsletter Editor Ruth Assily Contributing Writers Ruth Assily Jay Valancy Melinda Dahms Sally Hopkins Newsletter Design Samuel Phung Newsletter Committee Jay Valancy Nora Omalza Sally Hopkins A quarterly on-line newsletter published by the University of California's Office of Loan Programs. The Office of Loan Programs administers housing assistance programs for recruitment and retention of faculty and senior managers in support of the education, research and public service missions of the University of California.

Question of the Quarter
Should I send the University a copy of my current Homeowners Insurance policy every year? The Mortgage Origination and Supplemental Home Loan Programs require that a current homeowner's insurance policy is provided to the Office of Loan Programs (OLP) at the time of annual renewal as verification that satisfactory hazard insurance is maintained on the property. Generally, these renewals come from the insurance company. If you cancel your homeowner’s policy in order to move to a different provider, the University will receive a notice of cancellation. You should instruct the new provider to send a copy of the declarations page to OLP. If we don’t receive a notice from the new company, we will contact you to find out the status of your insurance. If your homeowner’s insurance is paid as part of your Homeowner’s Association (HOA) dues, you may not be aware if the HOA changes insurance carriers. In this case, OLP may contact you for information concerning the new carrier. It is the responsibility of each homeowner to ensure that OLP is provided with proper evidence of insurance. Just ask your Homeowners Association or your current insurance agent to fax or mail us a copy. The policy should also have the University of California listed as the Mortgagee. The Mortgagee clause should read: THE REGENTS OF THE UNIVERSITY OF CALIFORNIA Its Successors and/or Assigns Office of Loan Programs 1111 Franklin Street, 6th Floor Oakland, CA 94607-5200 -- Melinda Dahms

Notes of Appreciation (from Borrower Surveys)
Having worked with a similar program at [another University], I can tell you the UC program is far superior. So far, my experience has been extremely positive. Thank you! It was a pleasure to work with [OLP Staff]. We found our entire experience very satisfactory. In particular, we found [campus staff] very helpful. We were extremely satisfied with the entire process! Thank you!

OLP Announcements
Check out our: View My Loan Website

Winter/Spring 2006 - OLP Net News


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