Tag: Reassurance

How to Dispose of End of Life Network Hardware Securely

Greg Stone asked:

Recent events highlighted in the press demonstrate a very sound business case for employing secure methods of disposal of redundant IT equipment.

A particularly poignant example is that of a second hand server purchased from the internet which contained the personal data of one million customers of the Royal Bank of Scotland, National Westminster Bank and American Express. Not only does this represent a serious breach of confidentiality, but it also breaches legal requirements which now make IT owners responsible for data integrity and computer hardware disposal. Naturally, this event has received endless negative publicity for the companies involved, but has served as a warning shot to everyone responsible for hardware and data integrity.

To avoid problems, it is essential for organisations to work with a company that is fully conversant with and works within the parameters of current WEEE requirements which came into force on 1st July 2007. It is essential that any company offering this service is able to demonstrate its integrity and that it takes seriously its responsibility for secure removal of data from your hardware. Without this reassurance, a company cannot guarantee to its customers that their data is secure and cannot be sure that it will be working within the law.

It can be cost-effective to dispose of IT equipment through an organisation that offers refurbished products and will purchase your redundant kit – thereby providing some return on obsolete assets. A reputable specialist in hardware refurbishment will ensure that any product capable of being recycled will be refurbished and marketed for further use. Any parts not reusable can be broken down and the materials reformed to create a different product at a fraction of the cost to the environment of making new products or of dumping in landfill. As end users are responsible for the disposal of their equipment, great care should be taken to find a partner that has robust methods for dealing with this and that they can provide proof of adherence to WEEE where necessary.

In addition, to the egocentric reasons for ensuring safe retirement of obsolete kit, there are also many altruistic considerations. On average, a person in the UK disposes of 3.3 tonnes of electronic and electrical waste in his lifetime and households and businesses between them throw one million tonnes away each year. By recycling, this can be reduced – the potential for recycling IT products being in excess of 80 %. The cost to the environment encompasses not simply the pollution caused by decaying machines, both physical, aesthetic and chemical, through increased land-fill sites or indiscriminate dumping, but also by the additional pollution from manufacture of new machines using all new materials to replace them.

Should you find your kit is worth little either recycled or resold, or should you have a policy of supporting charitable organisations, there are a number of ways to donate your kit to worthy causes which could not otherwise afford IT or would have to divert much needed cash resources from their other important activities.

Your Home Appraisal –what’s the Big Deal?

Kristin Abouelata – Home Loans asked:

Think about why this is true. A good appraisal is the best reassurance that the lender won’t lose its pants on the transaction. If the borrower defaults, the lender still has a marketable property that can be sold to recoup its losses. All of which makes it understandable why lenders are so picky about appraisals. And with recent changes in the industry, the focus by lenders to obtain good appraisals is at the forefront.

Appraisals typically cost anywhere from $350 to $400. However, if the house is gigantic, multi-unit or in the boondocks, it could run more. The cost varies on property type, location and square footage.

The most common type of appraisal is the Uniform Residential Appraisal Report (URAR). It consists of interior and exterior photos and sometimes (depending on the age of the home), a complete cost breakdown of the property and comps (comparison sales of homes nearby that meet the proper criteria). These comps help determine the “market” approach. Each comp sale is adjusted in value when stacked against the home being evaluated (the one you’re buying or refinancing). Usually you will see a comp below the value of your home, in line with the value of your home, and a third above the value of your home. Kind of like the three bears. But if the valuation gets tricky, you can see fourth, fifth and sixth comps. The net value of the comps is estimated based upon the approaches used to come up with the appraised value of your property (meaning the appraiser performs some type of calculation that’s kind of like an average, but not necessarily a true average. Confused yet?)

URARs also, typically but not always, reflect a cost approach, which determines what the value would be based upon what is estimated it would cost to rebuild the home, less depreciation. The final estimated value of the home is then determined by using a melding of the market approach described above and cost approach (if applicable).

Lori Babb, Staff Appraiser for Mortgage Investors Group of Knoxville, TN, further explains comparables. “The best comparables are those similar in size, style (ranch, basement rancher, 2 story, etc.), age, and are close in proximity to the dwelling being appraised,” she explains. “Unique properties will typically require more adjustments than the average properties.”

So, say you’re Bill Gates and want to secure a mortgage on a $200,000 home (I know, it’s ridiculous, but I’m trying to make a point). He’s got the best credit profile a lender could imagine, yet the house appraises for $175,000. Deal or no deal? You better believe it’s no deal. The sales price will have to be lowered, or Mr. Gates will just have to pay cash for his new home (you think he can afford it?). The point is, your average Joe won’t go ahead with the deal without a price adjustment, and he will be obligated to pay for the appraisal regardless of the outcome of value.

Dan Tyrell, principal of Knoxville area’s Tyrell Appraisal Service, Inc., has this comment about value, “When determining value of a single family house, beauty is more than ‘skin deep’. Fresh paint, new carpet, new appliances, and nice landscaping all enhance the marketability of a house. Not so obvious items also impact the appraised value of a house. For instance older houses that have replaced plumbing/electrical systems, updated HVAC systems, newer roofs, replacement windows, etc. lower the effective age of the property which in turn increases the appraised value.”

There are other types of appraisals that are not as common, like an Automated Valuation Model (or AVM). In this case, different factors combine to ensure the value of the home (it’s worth $200K, but your loan amount is only $100K) and your unbelievable credit worthiness (800 credit score!), allowing you to skip purchasing a typical appraisal. You may also only be required to get a “drive by” appraisal, where the appraiser just inspects the exterior of the subject for size, looks at the lot and makes you wonder who that person standing by your mailbox is.

Most lenders control what appraiser is used to determine the value of your home. After all, it’s their money on the line. The appraisal is such an important factor to the mortgage transaction – make sure you’re satisfied with the results. Your lender will make sure it is satisfied!