More on a corrupt and unregulated system, one that will now crash the world economy. Seriously. The Great Unwinding was preventable, yet so predictable. Corruption, bribery and an out of control REIC will be to blame my friends. There should be no surprises from here on out.
Bribing or pressuring an appraiser should be a felony, 5 years in prison for the first time offense. And all appraisers should complete mandatory training and testing, and be employed by the federal government. The game is up. The crash will be the catalyst.
Appraisers Under Pressure To Inflate Values
With home prices softening and sales volume sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions.
With home prices softening and sales volume sagging in many local markets, real estate appraisers say that pressure on them to inflate values has reached pandemic proportions.
A new survey of the national appraisal industry found that 90 percent of appraisers reported that mortgage brokers, real estate agents, lenders and even consumers have put pressure on them to raise property valuations to enable deals to go through. That percentage is up sharply from a parallel survey conducted in 2003, when 55 percent of appraisers reported attempts to influence their findings and 45 percent reported "never." Now the latter category is down to just 10 percent.
"You've got a situation where sales are down so everybody in the deal needs it to go through" at the contract price -- the mortgage broker, the real estate agent, the lender and the sellers, said Alan Hummel, senior vice president of Forsythe Appraisals of St. Paul, Minn., one of the largest property valuation firms in the country with 40 offices and 190 licensed appraisers. Forsythe was a co-sponsor of the new study.
Loan brokers are now routinely "dialing for values," Hummel said. "They call up appraisers and say, we've got this sale at $335,000 at such and such an address. Can you get to that number?" If an appraiser answers yes, he or she gets the assignment. If not, the appraiser is bypassed.
Worse yet, Hummel said, when an appraiser comes back with a market value estimate that is lower than the sales contract price, the appraiser may not get paid for the work, and may be blackballed by the mortgage broker or real estate agent.
17 comments:
New paradigm = Maximize profits today, worry about later, later.
Ayces said...
New paradigm = Maximize profits today, worry about later, later.
February 11, 2007 10:36 PM
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Then the new paradigm is no different than the old paradigm, just ask HSBC.
Not the kind of article you would expect from a previous NAR cheerleader like Kenneth Harney.
Maybe they cut his check off to pay for that 40 million dollar propaganda campaign...
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Here's the new boss, same as the old boss!
Why does this remind me so much of all the scandal that occurred during the dot com run-up? Remember all the instances of brokerage houses using their ANAL-ysts to pump a stock their banking division was under-writing?
As we all estimated, that bubble just morphed into the housing bubble. With surprising similarities.
well, "it's the transaction fees" stupid! It's good for things to go up and down, it creates "work" and that generates "money."
Yeah, the reward of so much corruption is a crash. And it will do harm to everyone. Except for an ER doc I know. He'll never run out of bizness.
Wow! This is the united States of America now. No different than other corruption countries in the world. But it still proud to be a best place in the world Ho Ho Ho.
Pissed off realtor...
http://video.tinypic.com/player.php?v=339sz9k
Appraisers don't need to be federal employees and in fact that would probably be quite bad. Governments are renowned for corruption of all forms. But the appraisers should be chosen by the banks not the mortgage brokers. After all the banks have skin in the game and the mortgage brokers don't. Also, the bank may have to buy back non-performing loans. Perhaps they should get the mortgage brokers skin in that game by paying them based on the performance of the loan in the long term. That might align the interests of the multiple parties more effectively.
http://youtube.com/watch?v=WkpjH00RIb8
This is definitely related to the passing of Anna Nicole Smith. I'm sure.
The Soprano family must be all over this industry. Man, I'm about to become a crook , too, because it seems that white collar crime pays in this country.
Worse yet, Hummel said, when an appraiser comes back with a market value estimate that is lower than the sales contract price, the appraiser may not get paid for the work, and may be blackballed by the mortgage broker or real estate agent.
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Are not sales down becasue prices are too high??
Anon 8:43
The Sopranos actually did an episode 3 or 4 seasons ago where "Vic the appraiser" got his ass beat to come in at a value for a HUD scam they were running.
The problem is that the state regulatory boards have no teeth. In obvious cases of fraud or at least gross incompetence they hand out a $1000 fine and 15 hours of class. For the skippy boy appraisers pulling down 100k + when they're really qualified to work at fast food joints its worth the risk. The answer is to go Saudi Arabia on them. You don't see theft on the upswing after you chop off a few hands.
The real problem is that they don't want to know about it when business (fees, originations) is good. Banks employ "staff appraisers" that can review any appraisal sent to them. It is their job to stop the nonsense coming in from corrupt mortgage broker whores and their lapdog "hit the number" appraisers.
As far as appraisers working for the government - look at the Transportation Safety Authority or TSA. Want to know what pilots, flight attendants, etc.. call them?
(T)HOUSANDS (S)TANDING (A)ROUND. All they did was take a bunch of $7.00 an hour employees and turn them into $50k+ a year, full govt. benefits, pension strain, down the line Democrat voters on the U.S taxpayers dime.
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