By TA Webster
Excuse me, over here… I too am an endangered species. I am one of the millions of Americans who struggle on a daily basis to make it through very troubling economic times. Like many who are suffering from lost jobs in housing & related industries (construction, real estate sales, mortgage, title & escrow, appraisal et al), I was once able to hang on when business was good. Now that employment is virtually non-existent in housing, I am forced to compete for jobs in service or general labor. I am often overlooked because most people consider me over-qualified.
I’m a regular working class Joe. I’m a citizen who (like many) is tired of paying such a huge price for my “Democracy”. It is a well known fact that accounting for war spending cannot be verified by the Pentagon, Department of Defense, or anyone else who would normally be held accountable for trillions of taxpayer’s dollars.
In addition, the direct and indirect costs of illegal immigration (which many estimate to be about $350 -$400 billion annually) means, in essence, that I cannot give my children State healthcare coverage in my time of unemployment because the year before last I made too much money. Meanwhile, most illegal aliens and welfare recipients get all kinds of freebies. The free rides on the gravy train are booked at capacity. Paid for by none other than – guess who – US taxpayers.
On the housing front, one would think that the same government officials who played up the housing market would have at least rang the warning bell, in advance, regarding uncontrolled housing prices. And where was the media’s objective eye regarding the inescapable coverage playing “record gains, record gains and more record gains”? We went from soft landing to full blown crash. Thanks for the warning. I don’t recall hearing any mention of the possibility of an overheated US Real Estate market until it was way too late! Nor did we hear about investors who posed as owner occupants, while using sub-prime loans to flip houses at 100% LTV. That was the profile for many sub-prime borrowers who flipped and sold well before the crash.
A lot of people (myself included) were led to believe that buying a piece of “the American Dream” was the best thing we could do. We heard that we’d better "buy now or else be priced out forever", that "house prices never go down" and my all time favorite "you’d better offer more than the asking price or else the seller may not pick your offer". Better late than never, right?
Now take into consideration;
- The Bear Sterns bailout.
- Fannie Mae & Freddie Mac accounting “irregularities” to the tune of hundreds of millions of dollars (if you could ever straighten out their financial records).
- Frank Raines skipping out with hundreds of millions missing, obtaining relief from public scrutiny via a super quick behind closed doors investigation and giving back his worthless devalued stock as penalty while Freddie Mac’s insurer pays the claim (via taxpayer funded insurance premiums). This guy knew too much and I can see why they wanted it swept under the carpet so quickly.
- $59 Billion still missing and unaccounted for from HUD (when Catherine Austin Fitts tried to audit the agency).
- Huge executive pay packages, big bonuses, stock option and golden parachutes for some of the most prominent CEO’s in the industry – while they drove their busses right off the cliff. That’s okay, we’ll just have to "restructure" our capital.
The sooner we realize that this catastrophe was not about buying homes (it was about loaning money), the sooner we can begin to deal with the repercussions of failed policies that helped line the pockets of a privileged few.
Basically, had FIRREA (Financial Institution Reform Recovery Enforcement Act) been enforced "as written", we wouldn’t have such a mess on our hands today. FIRREA was put in place after the S&L crisis and was subsequently neutered. The S&L crisis was somewhat similar to what we are experiencing now except that (a – losses in today’s crisis are much larger and (b – the real estate appraisals were made to come in intentionally low, mainly on commercial properties, so as to write down assets and take advantage of a government bailout that was called the Resolution Trust Corporation or RTC. Aha – something sound familiar? After all the dust settled, lenders took control of the appraisal vendor selection process in order to protect themselves from getting scammed and left with, you guessed it, overvalued real estate.
They say the best way to rob a bank is to own one. Google “S&L crisis”, “Bank Fraud” and “Appraisal Regulation” and see what comes up. Most legislators are keenly aware of what took place during the S&L crisis. It is often said that policies are meant to be "shifted" and loopholes exist for those who know just where to find them… ain’t that the truth! Allowing banks and lenders to retain control of the vendor selection process is a big recipe for disaster as evidenced by our current financial meltdown. Keeping lists of ‘approved vendors’ or AMC’s Appraisal Management Companies, utilizing AVM’s Automated Valuation Methods or any other non-conventional form of valuation is a contradiction to true "independent assessments" of value as performed by local, experienced real estate appraisers. Let’s keep way far away from all that computer generated GARBAGE!
You would think that the President of the United States and members of Congress would be a bit more in touch with the ranks of the “working poor” who bought late into the American Dream and are now upside down in their homes. This is why appraisal regulation is important to all of us! Perhaps if the President and members of Congress were placed into the workforce after serving office (minus the pension and benefits they receive, in perpetuity), we would see the need to create stability and security for low-to-middle class Americans come quickly and clearly into focus. Maybe we’d still have a housing industry with jobs available today if all of the excess that came from rampant speculation and jacked-up real appraisals were not allowed to go unchecked for many years.
This time around, we need not allow the lobbyists on Capitol Hill to influence proper regulation regarding real estate appraisals. Buyers are paying for an appraisal, yet they receive no disclosure, and are unaware of the bedfellow relationships permitted to take place in the lending industry. We’ve suffered enough already!
What a terrible shame – that in this great country we call the US of A, birds, trees, gophers, snakes and turtles have more protection than do the working class citizens.