I am usually not a very big proponent of playing the "Blame Game". However, I think we all agree that we need to isolate the cause of a problem in order to determine the cure. Once again, lenders are at the root of the problem. Another blogger, wrote about the issue of lenders writing down the valuations of commercial loans and forcing builders (in this case) out of business; see her blog here: http://activerain.com/blogsview/900356/Forget-The-Market-How-Will-The-Builders-Survive-the-Banks In this instance a solid, established builder is effectivley put out of business by bank greed.
Last evening at a trade association meeting, consisting of realtors and mortgage professionals, I kept hearing the same issue: APPRAISALS. Many appraisers are using time value adjustments to de-value properties, the same way they over-valued on the way up. In one example it was 4% PER MONTH. At that rate in approximately 2 years the property will be worth ZERO!! What is going on?! We have buyers who want to buy, are qualified but the lenders are OTL (out to lunch)!!
Then this morning, I see this article: http://www.heraldtribune.com/article/20090205/COLUMNIST/902050334/2117/REALESTATE?Title=Abuse_of_the_appraisal_process . The same issue is being faced by many commercial property owners, in the name of greed. The "mark the market" concept is being used to extract cash from borrowers that are current on their loans and otherwise surviving. This technique threatens what little stability is left in our market. I am a believer in a free market economy and generally don't approve of government intervention, but in this instance, our elected officials need to do something NOW!! Let's all rally to stay educated and politically involved.
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