By: Steve

Steve — Wed, 08 Dec 2010 00:18:39 +0000

I disagree with Peasant Pundit. I’ve been in the lending business for 30 years and the rotten part of the business was not the appraisal process. Sure there may have been some crooked appraisers, but all the ones I ever dealt with were like Mark Hepner, upstanding professionals. A few bad appraisals didn’t cause this housing mess. Most of the meltdown problems were caused by the nothing down, no income verification lending terms and low rates that allowed many people buy homes they couldn’t afford or to live off their credit cards and then pay them off through a refinance with a lower mortgage payment than they had before. Many times I have read news articles about homeowners who were losing the house that they bought for say $75,000 and now had a $200,00 mortgage on it. Of course it was always a sad tale about how some crooked mortgage broker gave them an adjustable rate loan and now that it adjusted they were losing their home. No reporter ever points out, that if they would have just paid on their original $75,000 or less mortgage and not paid off their credit cards or other loans multiple times with their home equity piggy bank they wouldn’t be in this mess. And who was pushing the loosey goosey loan terms, the government that wanted a higher rate of homeownership especially for those that were minorities or on the lower part of the income curve. Who pushed the adjustable rate loans over fixed rates, Alan Greenspan. CRA type policies created an artificial demand that increased the price of housing, encouraged a building boom to meet the artificial demand and set up the collapse when people who lost their jobs or couldn’t afford their house in the first place started to default. Then the dam broke and we are living with the results. You all need to remember, Mortgage Brokers couldn’t have frauded up any loans if Fannie and Freddie were doing their due diligence like they used to. Fan and Fred worked their way down the qualification curve because they had quotas of CRA loans they had to fulfill to satisfy the requirements of Barney Frank, Chuck Schumer and several others in Congress. It was a race to the bottom caused by the government, and now Congress is pointing fingers in the wrong direction, at appraiser and mortgage brokers, instead they should be looking in the mirror.

By: Peasant Pundit

Peasant Pundit — Tue, 07 Dec 2010 16:50:13 +0000

Give me a break. Appraisers were a major link in the whole rotten real estate mess. Maybe the real estate industry still expects the easy money of the “boom” years of zero down loans and phony evaluations?
As O’Brien admits,”it has made the process more honest.”
Real estate consumers have not enjoyed the benefits of efficiencies most retail businesses have long ago embraced. Commissions galore are charged to right to buy a home – why can’t this process be streamlined?
Charge consumers more for appraisals? They were worthless before – now earn your keep.

Comments on: Brokers unhappy with new home appraisal rules

By: Steve

By: Peasant Pundit