By TA Webster
 

"A lot of us saw this train wreck coming" – John McCain.
           ((( at 8:34 on the video )))
McCain and Obama debate Sept. 26 – Sen. Obama & McCain debate.

McCain and Obama debate


SO WHEN HE SAYS "A LOT OF US" WHO DO YOU
THINK HE WAS REFERRING TO AND, MORE IMPORTANTLY – WHEN WERE THEY WERE PLANNING
ON TELLING US, THE AMERICAN PUBLIC ABOUT THE POSSIBILITY OF AN OVER-VALUED
REAL ESTATE MARKET?  SOUNDS STRANGE COMING FROM A MAN WHO NOT TOO LONG AGO
SAID THE FUNDAMENTALS OF THE MARKET WERE SOUND.  WASN’T THE S&L
CRISIS & RTC BAILOUT
ALL ABOUT OVERVALUED REAL ESTATE?

FIRST OF ALL, UNDERSTAND THAT A MAJORITY OF
SUBPRIME BORROWERS WERE NOT LOW INCOME BORROWERS.  THE "OPEN BAR"
MANTRA ON WALL STREET GAVE EASY ACCESS TO CHEAP MONEY AND HELPED FUEL MASSIVE
SPECULATION IN THE HOUSING MARKET, THUS DRIVING UP THE COST OF LIVING FOR
WORKING CLASS FAMILIES AND CITIZENS THAT JUST WANTED TO BUY A HOME TO LIVE
IN.  MANY FEARED THAT THEY NEEDED TO BUY SOON OR ELSE THEY’D BE PRICED OUT
OF THE MARKET.

CONSUMERS THAT  BORROW MONEY & USE A LOAN
PRODUCTS UNDERWRITTEN TO HUD, FNMA OR FHLMC STANDARDS ARE USUALLY REQUIRED TO
PURCHASE A REAL ESTATE APPRAISAL.  THE FEE IS TYPICALLY PAID OUTSIDE OF CLOSING
AND MAY BE SHOWN AS POC ON THE HUD STATEMENT.  THE APPRAISAL SHOULD BE
NON-BIASED (NO DIRECTED APPRAISALS – WHERE THE CONTRACT OR LOAN AMOUNT IS
GIVEN TO THE APPRAISER IN ADVANCE)
AND MUST REPRESENT THE HONEST VALUE OF
THE HOME.  THERE’S ANOTHER COMPONENT OF THE APPRAISAL THAT DESCRIBES
MARKET CONDITIONS AND ANY ADVERSE EFFECTS (IF ANY) IN THE LOCAL HOUSING
MARKET. 

THE IRONY IS – THE REAL STORY IS NOT ABOUT
SUB-PRIME LOANS, IT’S ABOUT COMMISSIONED LOAN OFFICERS THAT FEARED LOSING
BUSINESS BY NOT CLOSING A LOAN BECAUSE OF A LOW APPRAISAL.  THE REAL
PROBLEM AT HAND IS THE LACK OF DISCLOSURE AND SEVERE LACK OF UNDERSTANDING (BY
CONSUMERS) OF THE RELATIONSHIP BETWEEN THE LENDER AND THE APPRAISAL
COMPANY.

THE SOONER WE REALIZE THAT THIS CATASTROPHE
WAS NOT ABOUT BUYING HOMES (IT WAS ABOUT LOANING MONEY), THE SOONER WE CAN FIGURE OUT A WAY
TO PREVENT THIS FROM HAPPENING AGAIN IN THE FUTURE.

THE APPRAISAL COMPANY EARNS IT’S FEE FROM THE
BORROWER, BUT THE "LENDER" IS CONSIDERED TO BE THE CUSTOMER OF THE APPRAISAL
COMPANY… NOT THE BORROWER.  REALIZE THAT THE IMPORTANCE OF AN APPRAISAL
COMING IN "AT THE NUMBER" AND NOT LESS MEANS THE DIFFERENCE
BETWEEN AN APPRAISAL COMPANY (AND A LENDER, AND A REALTOR) EARNING A FEE OR
NOT.  MANY TIMES THE APPRAISER WHO ACTUALLY PERFORMS THE APPRAISAL IS ONLY
GETTING A SMALL PORTION OF THAT MONEY – THE AMC’S TAKE A HEFTY CHUNK OF THE
APPRAISAL FEE THEN GIVE THE BALANCE TO THE APPRAISER ASSIGNED TO PERFORM THE
WORK.  THIS TOTALLY UNDERMINES THE APPRAISAL BUSINESS.

ANY APPRAISER THAT WAS HONEST ABOUT MARKET
CONDITIONS AND PRICES WAS RUN COMPLETELY OUT OF BUSINESS – LEAVING ONLY
COMPLIANT APPRAISERS WITH WHICH TO ASSIGN THE WORK.  EVEN THOUGH THE BUYER
(CONSUMER) IS PAYING FOR APPRAISAL SERVICES, THERE IS LITTLE OR
NO UNDERSTANDING OF THE VALUE OF THE SERVICE BEING PROVIDED FOR THE
MONEY.  IF YOU WISH TO HIRE A "GOOD" REAL
ESTATE APPRAISER, WHAT DOES "GOOD" MEAN AND WHAT DOES A
"GOOD" APPRAISAL LOOK LIKE?  HOW CAN THERE POSSIBLY BE A TRUE
INDEPENDENT ASSESSMENT OF VALUE WHEN THE HOME TEAM (LENDERS) ARE ALLOWED TO
PICK THE UMPIRES (APPRAISERS) IN THE GAME.   

*GOOGLE SEARCH –
APPRAISAL PRESSURE AND LOSS OF JOBS IN THE APPRAISAL INDUSTRY

Example – real
appraiser speaks out –
http://garyhooser.livejournal.com/20142.html

WE’LL DISCUSS WHAT CONSTITUTES A
"GOOD APPRAISER"
SOME OTHER TIME, BUT FOR NOW LET’S FOCUS
FOR JUST ONE MOMENT ON WHAT CONSUMERS DO NOT KNOW WHEN APPLYING FOR A
LOAN:  ALTERNATIVE VALUATION MODELS OR AVM’s, BANK "REVIEW"
APPRAISERS, APPRAISAL MANAGEMENT COMPANIES OR AMC’s, APPRAISER PRESSURE,
UNLOCKING OF SECURE PDF FILES THAT CONTAIN SENSITIVE DATA AFTER AN APPRAISER
USES HIS OR HER ELECTRONIC SIGNATURE, ETC.  

CHECK THIS OUT – FROM THE NEWS;  The Attorney General of New York filed a lawsuit
accusing Washington Mutual (WaMu) of conspiring with First American eAppraiseIT
to artificially inflate the appraised value of borrowers’ homes on Washington
Mutual home loans made since mid-2006. Washington Mutual borrowers were charged
hundreds of dollars each for these bogus appraisals. Besides the needless cost,
an artificially inflated appraisal can result in loan amounts and terms that
are unfair and harmful to the borrower. This is because the appraisal sets the
market value of the borrower’s home which in turn is used to determine the
amount and terms of the loan. Thus, an accurate appraisal is essential to
ensuring that the amount and terms of the loan are fair and appropriate for the
borrower. 

SO WHY THEN IF THE MCCAIN CAMP "SAW
THIS TRAIN WRECK COMING"
, DIDN’T THEY GET UP, GIVE LAST CALL TO
THE WALL STREET FAT CATS WHO PRESIDENT BUSH SAID GOT DRUNK (‘W’ KNOWS BECAUSE
HE WAS IN THE SAME BAR WITH THEM, THE FED RES BOARD, SEC & EXCH COMM,
TREASURY DEPT, FANNIE MAE, FREDDIE MAC, ETC.) AND GET THE SITUATION UNDER
CONTROL?  BECAUSE TOO MANY PEOPLE WERE MAKING MONEY @SS OVER FIST. 

AND WHY TO THIS DAY ISN’T THERE ANY SHRED OF
PROTECTION OR DISCLOSURE ABOUT REAL ESTATE APPRAISALS AND THE VENDOR SELECTION
& AUTOMATION PROCESS THE DRIVES THE APPRAISAL AND LENDING INDUSTRY? 
LORD KNOW ONE MUST SIGN A STACK OF PAPERS A MILE-HIGH WHEN CLOSING ON A HOME,
MOSTLY LOAN DOCS, BUT THERE IS NOT ONE PEEP ABOUT THE RESULTS OF THE REAL
ESTATE APPRAISAL THAT THE CONSUMER PAID FOR.  WHAT AN INJUSTICE! 
   

IN SUMMARY, IF A CONSUMER PAYS FOR AN APPRAISAL –
HE OR SHE OUGHT TO BE GETTTING THEIR MONEY’S WORTH! INSTEAD, WE GET TO PAY FOR
A $700 BILLION DOLLAR BAILOUT.  THANKS WASHINGTON FOR LETTING US KNOW ABOUT
THAT TRAIN COMING DOWN THE TRACK!  SOFT-LANDING FOR
THE HOUSING MARKET HUH???  I THOUGHT THOSE LIGHTS COMING AT US
MIGHT HAVE BEEN THE KIDS OUT IN THE NEIGHBORHOOD PLAYING FLASHLIGHT TAG

SILLY ME ;~)

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