Tagged: collapse

Appraisal Waivers Expansion - FHFA Risky Move 30

FHFA’s Appraisal Waivers Expansion

The Federal Housing Finance Agency’s (FHFA) recent push to expand the use of appraisal waivers represents a concerning and potentially disastrous gambit that threatens to undermine the integrity of the housing market and the broader economy as a whole.  The recent announcement from the FHFA Deputy Director Naa Awaa Tagoe regarding the expansion of appraisal waiver eligibility for purchase loans is a significant development that has sparked debate and controversy within the mortgage industry. By increasing the maximum allowable loan-to-value (LTV) ratio for full appraisal waivers from 80% to 90%, and for inspection-based appraisal waivers from 80% to 97%, the...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM / Federal Housing Finance Agency

White Swan Predicts that the Next Recession Is Inevitable 10

The Black Swan – Another Meltdown

Another Meltdown – The Inevitable Outcome of a White Swan: Why would we allow another Financial Meltdown to occur? …When revenues and profits decline, lenders and financial institutions throw caution to the wind and relax their once prudent lending policies in favor of more aggressive, inclusive policies… Hindsight has taught us that there is no serious consequence to imprudent lending policies. Perhaps a multi million dollar fine is assessed but that is just the small cost of doing business for some violators… Though more common now, especially in Australia, Europe, and  Asia, black swans (Cygnus atratus) were once thought to...

Appraisal / Appraisal News / Appraisers News / Automated Valuation Models / AVM

BPO Outsourced to India Replacing Appraisals 27

BPOs ‘Made in India’

$10 a pop ‘Made in India’ BPO… When saying you’re 'sari' just won’t do. The Blackstone Group is nothing short of legendary. To say it is a 'Big Deal' is an understatement squared. A little background from their website. “Who We Are Our investments are designed to preserve and grow our limited partners’ capital, provide financial security for millions of retirees, sovereign wealth funds, and other institutional and individual investors, and contribute to overall economic growth.” An honorable & worthy objective by any measure. Helping retirees on fixed income, little old ladies, grandmothers and mothers, albeit wealthy ones I’d guess. Sovereign...

AGA / Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / Fannie Mae - Freddie Mac

Greed Takes Over With Next Loss of Memory 14

Greed Takeover Coming Soon

Basic greed and institutional memory I am amazed how many times in my lifetime I have seen the past repeat itself. Beginning in the 1970’s, I have witnessed one form of financial meltdown after another, each occurring almost precisely 10 years after the last. I once had a wonderful professor who explained that the seemingly inevitable repetition of the past was based on numerous, very different factors, but with two factors appearing in virtually every case. The two “alpha” factors are (1) basic greed and (2) institutional memory. Basic greed is when one group of people is willing to compromise...

Appraisal / Appraisal News / Appraisers News / CFPB / Consumer Financial Protection Bureau / E&O

Lesson learned or Lessons Lost 12

Haven’t We Learned Our Lesson?

Lesson Learned or Lessons Lost? Many have heard me say that we should expect a large market correction around 2019-2020. Some agree, some think it will be sooner, and I am sure there are some that don’t think it will happen again because we learned our lesson. There are a ton of factors that drive it so it’s not an easy thing to predict. The good news is most agree that there will be one, we just don’t know when. We have not learned our lesson and the lesson will be repeated. I’ll share my 2 cents on this and...

Appraisal / Appraisal News / Appraisers News

Mortgage lending a lot like musical chairs 5

Mortgage Lending a Lot Like Musical Chairs

Mortgage Lending – Déjà Vu…All Over Again Philosopher George Santayana once said, “Those who cannot remember the past are condemned to repeat it”. In light of recent actions in the mortgage lending industry, we all may be able to experience the thrill ride of 2007-2009 all over again…soon. You may wonder what actions I am referring to so let me share a brief list of what I will call the top ten contributing factors to the downturn I see happening by July of 2017. By 2017 it will have been 10 years since the start of the last collapse in the...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions

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Are the Inmates in Charge of this Asylum?

What really caused the real estate market to collapse? While much has been written about the multitude of complex reasons behind the collapse of the real estate market in 2007, it is the opinion of this writer that there is one primary reason for the collapse. Simply stated, banks loaned money to borrowers who lacked the ability to pay back the loan. That’s it, pure and simple. If you loan money to someone who has no resources to pay back your loan, you will lose money almost every time and it matters very little if you have any collateral for...

Appraisal / Appraisal News / Appraisers News / E&O / Errors & Omissions

Why are Appraisers Furious at Fraud by their Peers while Corporate Lawyers are Complacent? 1

Appraisers Furious at Fraud by their Peers

Why are Appraisers Furious at Fraud by their Peers while Corporate Lawyers are Complacent? I have done a series of articles about the efforts of honest appraisers (which began in 2000) and loan brokers to alert the lenders, the markets, and the government to the twin fraud epidemics (appraisals and “liar’s” loans) committed by lenders’ controlling officers that drove the financial crisis. Honest appraisers could have profited greatly by becoming dishonest appraisers who would be given the lucrative assignments by fraudulent lenders’ controlling officers and their agents. Instead, honest appraisers suffered serious losses of income because they refused to succumb to...

Appraisal / Appraisal News / Appraisers News

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