https://activerain.com/blogsview/5268969/a–1-million–theft–william-drabick–senior-property-appraiser-investigator–state-of-california–breau-of-real-estate-appraisers–brea–falsify-s-resume-to-obtain-a–111-000-position

ALSO, CHECK OUT MICHAEL MORE’S DOCUMENTARY ON CAPITALISM

The VA and FHA have been guaranteeing zero down and 3% down pmt. loans since the end of WWII and in the case of FHA since 1934. Low or no down payment loans are not the problem. Loans BEYOND a borrowers ability to repay, are.

If we listen to E&O insurers, no loan would ever be made to anyone with a FICO under 780, and 20% down payment. Basically a return to the 1960’s.

Loans to borrowers with minor credit problems are also not the problem, unless one of the credit problems included not paying rent on time.

Excessive profits to brokers and lenders for sub prime loans with unrealistic (high cost) terms are the problem. Loans with adjustable rates for qualifying purposes are the problem. Rates with adjustment mechanisms that can adjust in short periods beyond borrowers ability to repay are problems.

Bundled securities are a problem (that can be fixed). When the crash hit, no one institution had the ability to analyze one specific note and determine if a loan work-out made sense. Servicers not only had no authority to renegotiate such loans, their profiting from late payment fees gave them a disincentive to negotiate loan works outs.

Lastly, the BIGGEST problem was the (up until that time) greatest theft of money in the history of nations, put into motion by Henry Paulson, then Secretary of the Treasury. Wall Street and others never needed a bailout; but arranging one, made millions if not billions for his favored friends (read Goldman Sachs, anyone?).

IF he was truly concerned about an investor ‘crash’, ALL he had to do was go to Congress and obtain emergency authorization for the United States to purchase any and all defaulted loans; with or without the consent of the note holders. Not only would there have been no collapse, but the depth of losses sustained by anyone would have been severely limited and we’d have more than recovered by now. Rather than allowing half million dollar mortgages to be defaulted, with insurers paying off the top 25% (and being reimbursed by Uncle Sugar), we could have left the 2% rate loans in effect with U.S. purchases of the notes.

JOBS would not have been lost because the real estate market would never have collapsed. We would not have been spending over a trillion a year MORE than we earn. ALL of those defaulted loans would have remained profitable, PAID mortgages at the 2% rates, until the market could recover on its own.

There would have been no trillion dollar pool of funds for politicians to raid for special groups benefit.

The holding of notes for three years is common (and sound)practice, to let a sub prime borrower prove ability to repay and develop ‘seasoning’ of a payment history. Coupling that ‘seasoning’ with a note whose payments are set to increase from 2% interest rates to 7% or 8% rates was just plain STUPID! All the borrowers proved was their ability to make pmts. on 2% rate notes; NOT 8% rate notes!

FREA is a good E&O insurance company. They should stick to what they know how to do and leave real estate markets to those that understand them.

While input from bankers and mortgage associations is important, so too is input from appraisers; and experienced realtors, and licensed sales associates. Not to mention economists with experience in household budgeting in the real world.

For those who committed fraud, the solution is also simple. JAIL THEM!