I was reading, recently in one of my internet browsing, that the GSE's are considering allowing some borrower to refinance without the use of an updated appraisal. WOW, that has scared the daylights out of me.
So if you do not know what a GSE is let me explain. They are a hybrid form of a Corporation, designed to take privately provided capital to develop public missions. That means they do not use any tax payer money, nor do they have government guarantees to their securities. They surfaced in 2003 and 2004 on the radar screen, for being in the news for various financial irregularities such as how they raise private capital and how they do their accounting. (I could write a book vs. a post about that).Fannie Mae(FNMA) and Freddie Mac(FHLMC) own upwards of 70% of all the residential mortgage loans in the US. They are GSE's. As we all know what happened to them.
So getting back the old adage: "...why should another appraiser get paid for a current opinion of value...Have we forgotten or can we not recall the Savings and Loan Crisis? If a lender has the loan why should it be automatically refinanced without an appraisal?
Let us think about that, what has been going on all over the country price depreciation anywhere from 10% to 40% depending on the micro market. At the minimum if we do not take this into consideration, what if the condition of the property has changed? Would you as a lender like to know that? Seems to me we are setting ourselves up for the next Financial Crisis.
Basically HUD (the US Department of Housing and Urban Development) has allowed "streamlined refinancing" i.e.: without an appraisal on FHA loans since the early 1980's. This is according to their publication on it is on department's Web Page.
Basically in their haste to make it easier for borrowers to refinance in various situations, they are prepared to throw safety and common sense aside. This is what happened recently in the haste to allow people loans that should never have gotten loans the GSE's are about to create the next mortgage crisis. So what do you think? I am asking as a concerned Taxpayer and Realtor are we going to allow the seeds of a future mortgage crisis to be planted today? Seems to me we will never learn.
If you are a consumer who is considering buying or selling a home,investment real estate, vacation homes, or beach properties in Southern California, Los Angeles,Beverly Hills,Culver City,Marina Del Rey, Venice or Malibu. Feel Free to give me a call at 310.486.1002 (USA) or email me at EndreBarath@TheMLS.Com or visit one of my websites at http://www.endrebarath.com
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