Not Rocket Science or I Need a Raise

WaMu Accused of Pushing Inflated Appraisals

This perpetration of fraud was noted by me on Sept. 18th in a blog entry titled ( "Confessions of a Mortgage Broker". ) I state this not to shine a light on my powers observation, but to shine a light on the fact that if I as an uneducated individual can see what happened , why is it taking so long for educated people 'In the Know' to realize the situation and take steps. Interest rates went down, so the price people could afford went up. Once the realtors and sellers realized this, they raised their selling prices. Lenders of course wanted these larger loan contracts and so loosened the appraisal requirements. This lead to appraisers 'Bumping' values. They accomplished this by going outside the normal mileage limits for comparables and exagerating details on the appraisals themselves. My own lender stated to me "Don't worry about the appraisal coming through for the price, My appraiser will justify almost any value I need". My own property was listed with a detached garage to accomplish this. (a fact I didn't realize until a year later when it came time to re-appraise).
The situation with the housing market will only get worse quantumly unless someone does something NOW! Those people being refinanced with help from the newly passed legislation regarding ARM's are only the TIP of the iceberg. NO ONE attempting to refinance the home with a 'Pushed' appraisal will be approved once the 'Real' value is re-established. Lenders found to have participated in this (almost all in every market effected) MUST be made to to refinance these loans based on their "Previously Accepted Value" regardless of the customers current circumstance in order to avoid an economic disaster. Lenders pay for their indescresions and gain credibility back from the public, Customers will pay (refinance fee's) for their failure to research the actual value of their home on their own and gain the ability to retain their homes, We as a country will pay in probable higher fee's and less money making it's way into the retail sector, but we will gain stability and the all important Moral that stability brings!


Story Published: Nov 1, 2007 at 10:47 AM PST
Story Updated: Nov 1, 2007 at 3:30 PM PST
By Associated Press


ALBANY, N.Y. (AP) - New York Attorney General Andrew Cuomo said Thursday a major real estate appraisal company colluded with the nation's largest savings and loan companies to inflate the values of homes nationwide, contributing to the subprime mortgage crisis. "This is a case we believe is indicative of an industrywide problem," Cuomo said in a news conference.
http://www.komotv.com/news/local/10945796.html


Sunday November 4, 2007 - 07:11pm (PST)