MORTGAGE CRISIS_The Moral of the story is…

WE CAN figure out who is at fault regarding the housing mess!
Legally, a real estate appraiser is not supposed to accept a job from a client (lender) who has already ‘pre-determined’ what the appraised value should be. Real estate appraisers are given the loan amount in advance – because banks and lenders keep lists of which companies ‘comply’… blackballing the ones who refuse to ‘hit the number’. In essence that meant a lot of ‘good’ appriasers were put out of business for playing by the rules.        
There’s the problem – and yet it’s so sublte. In fact, it’s so subtle that it makes it harder to diagnose and solve the real underlying issues.
If buyers are responsible for paying for an appraisal – why do lenders get to choose who performs the appraisal? Shouldn’t there be more transparency in the vendor selection process? Bottom line – there is no disclosure regarding appraisals, the appraisal process, AVM’s, Appraisal Management Companies, etc.
THEY DON’T EVEN NEED AN APPRAISAL IF THE LOAN AMOUNT IS LESS THAN $250,000, but many consumers are unaware of this fact as well.
Now that the Nation is experiencing another serious financial “adjustment” like the S&L Crisis, lenders and GSEs will be able to point to Federally mandated appraisal regulations as their free pass to escape a Congressional inquisition (where property valuations may be called into question). They will have the appearance of having done everything according to “the book.”
MORAL OF THE STORY: “Don’t pee in your own pool – of mortgages”
On a separate note:
The government said last week it had settled its long-running effort to recoup hundreds of millions of dollars from Franklin D. Raines and two other former executives of Fannie Mae for their alleged role in an accounting scandal. See the entire online article at washington post dot com – search fannie mae.
However, I do think a more appropriate word to use here would be “CORRUPTION”! 
By the way, aren’t we still trying to find hundreds of millions of dollars that was missing at HUD back in 1999 – Oooops, my bad – it was $59 BILLION!



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