See:
Fresh
Pricks in Housing Bubble by Dan Ackman, Forbes.com
Appraisal Inflation and Where are the Loan Loss Reserves? Although a lot of folks believe Realty Reality is more Cassandra, Chicken Little, or Pandora opening that special box filled with bad stuff and tales of woe, we have been bringing inadequate loan loss reserves as well as appraisal inflation to our readers continually as major problems in real estate micro and macro markets as real problems partly fueling the speculation in real estate as a safe haven to park your spare cash or extract that extra equity over the top of the value of the property to spend, spend, spend. Finally Jane Wells at CNBC [Bubblevision] has learned the term appraisal inflation. Thank you Jane! This problem just suddenly crept up as big news, huh? Ehhh.... this has been going on since 1995 when the GSEs started using credit scores in lieu of realty as collateral to sell those MBS to global investors, and then the other folks like GE and GM got into the act in the ABS thing. Welcome to the world of cheap appraisals, drive by appraisals, no appraisals, and appraisals performed by inexperienced folks who can fill out a form and give the lender their number for the loan, at a cheap fee, undercutting the real professionals who can no longer get good mortgage loan work, as the whole mortgage loan industry has done a complete 180 since the S&L Scam. Ehhh, Jane, have you ever heard of Silverado Savings and Loan? The Mafia, CIA, and George Bush are recommend reading. But of course, the honest appraiser who thumbs his nose at lender client co-ercion dudn't get much work. That is why a lot of the good guys and gals are now working for UPS driving those brown trucks -- hey the work is easy, since they know all the streets. And, in the summertime, they can wear shorts to keep cool since the trucks are not air conditioned. Loan loss reserves? What's that? Let's just create a new kind of derivative, sell it on Wall Street, and have someone else bet against the risk of some of the Big Boys blowing up. Folks, if you are so naive to believe that the Federal Reserve has not used its monetary policy to inflate real estate prices, we are not on the same planet. This has been one of the greatest smoke and mirrors in economic history. We are set up for a wealth transfer to the Elitists of even greater proportion than the S&L Scam. That is just the tip of the iceberg. The devastation on the American People and how this could wreck homes, lives, and families for a couple of generations is a Pox Americana of central banking monetary policy. Some legacy, huh Alan? Yours truly, Ole
Bear, Editor See:
False
Records Said to Be Found at Fannie by Stephen Taub, CFO.com Ole Bear, Editor, Commentary Little Pieces of Ice Keep Falling Off this Sucker Falsified records at Fannie Mae as far back as 1998? Gee, why am I not surprised? Higher mortgage rates to bite? Yep, like a pack of Great White Sharks. Surging foreclosure listings? That surely couldn't impact the regular sales of real estate properties also on the market could it? Nahhhhhhh! Treasury Secretary Snow wanting to put blinders and new bridles on the GSEs fast ponies! Giddy Up! -- Trigger! and Hi Ho! Silver! Everyone has been lulled into having lots of debt on their real estate, and it so cool because you get to deduct the mortgage interest on your income taxes. What a deal! The above news and essay links remind me of bits and pieces of ice that fell on the decks of the RMS Titanic way back in April 1912 late one night when this supposedly unsinkable Royal Mail Ship tried to make a hairpin turn knocking the brittle plates off the hull for about a 300' stretch. It is no stretch of the imagination that the bulk of the big ice is below the waterline -- and cannot be seen by the naked eye. Speaking of naked, as Mr. Buffett says, when the tide goes out, we'll all learn who's been swimming that way. Yours truly, Ole
Bear, Editor © 2005 Realty Reality |
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