On May 18th 2009 I wrote a blog speaking about the new HVCC appraisal process. The Mortgage Reform and Anti-Predatory Lending Act of 2009, H.R. 1728, was introduced March 26 by coauthors Rep. Brad Miller (D-N.C.), Rep. Melvin Watt (D-N.C.) and Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
Here is the problem with H.R. 1728 / HVCC. This mandates that any Loan Officer most use a HVCC approved Appraisal Company when ordering a conventional loan appraisal. The problem here is the Banks are in control of these HVCC Appraisal Companies. This program is clear put in place for the Banks and/or Big Brother to manipulate values.
I will give you an example that is going on currently. There is a new KB home located at 16220 Limerick Street in Riverside, CA that has $120,000 in upgrades to the home. The KB homes in this development have recently been selling for roughly $450,000. The borrower wanted to get a conventional loan but the HVCC appeaser came back with a value of $400,000. This did not make sense based upon the recent sells within the development along with the $120,000 in upgrades.
The Loan Officer working with the borrower requested a FHA Appraiser to An FHA appraiser was sent to the home and came back with a value of $530,000. So how is this possible? The average sells price of the homes in this development is averaging $450,000. Coupled with $120,000 in upgrades simple math tells you the value should be $570,000. The problem with this is that some upgrades are nice features but they do not always add dollar for dollar value to the property.
The problem here is clear, the Fed’s are involved. Here are the facts, the Fed’s are now in the Insurance Business, Banking Business, Auto Business, Appraisal Business and soon the Medical business. So ask yourself, what type of legislation do you see coming out of DC? The system will correct itself if we just stop trying to find a quick fix. The Government can not fix everyone’s problems.
So it is clear, I do not want to see anyone lose their home but we need to stop the Loan Modification’s and just foreclose on these homes where people can not pay the mortgage. Where is the Media on this subject? There is a back log of qualified buyers looking to purchase a home and a shortage of homes for sale. The Fed’s are prolonging this housing market issue by giving the Banks bailout money.
If the Banks were not given this bailout money they would have just sold off their foreclosures to raise capital. There should be an investigation into why the Bailout money was given to the banks while they where sitting on foreclosed properties. Giving the Banks this bailout money allows them to create a home shortage which will drive up values. Simple supply and demand tells us this. Once the values come back up what do you think is going to happen and who will profit the most? It is the Banks and Obama is giving them Tax Payer money to make it possible. Why are we bailing out any Company? And worst of Companies sitting on assets. Would you or I get this kind of treatment? Is it possible there was some kind of backdoor deal made here? And yet again the Media is silent. It is unbelievable that the Media would rather report on Beer Gate than Bailout Gate!