Comments on: Mr Mortgage’s Guide to the TRUTH! http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sun, 21 Mar 2010 04:24:25 -0400 http://wordpress.org/?v=2.9.2 hourly 1 By: John Lorson http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-145424 John Lorson Thu, 12 Feb 2009 00:27:42 +0000 http://www.ritholtz.com/blog/?p=18669#comment-145424 Government Agencies, Wall Street firms and Lenders deceived homeowners and investors for profit. Special or creative financing was provided by these entities and placed an undue stimulus on real estate sales and the creation of mortgages. The FNMA/FHLMC definition of market value states the assumption the price is not affected by undue stimulus and the price represents the normal consideration for the property sold unaffected by special or creative financing. Government Agencies, Wall Street firms and Lenders knew the consequences of their loan products. They violated their own policies and procedures to increase their short term profits and in the process deceived homebuyers and investors. Homeowners and investors who can make their payments owe more than their properties are worth. Worse yet, combined with the return to traditional underwriting and the reduced number of qualified home buyers, properties will not be able to increase in value to the amount owed for 15 or more years. The answer is an orderly and cost effective modification for all real estate loans by accelerating the repayment of mortgages with the elimination of interest to receive the mortgage relief they deserve. In seven to eight years the homeowner and investor will be in an equity position. "The American People's Fix" Government Agencies, Wall Street firms and Lenders deceived homeowners and investors for profit. Special or creative financing was provided by these entities and placed an undue stimulus on real estate sales and the creation of mortgages.

The FNMA/FHLMC definition of market value states the assumption the price is not affected by undue stimulus and the price represents the normal consideration for the property sold unaffected by special or creative financing. Government Agencies, Wall Street firms and Lenders knew the consequences of their loan products. They violated their own policies and procedures to increase their short term profits and in the process deceived homebuyers and investors.

Homeowners and investors who can make their payments owe more than their properties are worth. Worse yet, combined with the return to traditional underwriting and the reduced number of qualified home buyers, properties will not be able to increase in value to the amount owed for 15 or more years.

The answer is an orderly and cost effective modification for all real estate loans by accelerating the repayment of mortgages with the elimination of interest to receive the mortgage relief they deserve. In seven to eight years the homeowner and investor will be in an equity position. “The American People’s Fix”

]]> By: Fred C Dobbs http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-145109 Fred C Dobbs Tue, 10 Feb 2009 22:01:31 +0000 http://www.ritholtz.com/blog/?p=18669#comment-145109 A good post Mr. Mtg. Just as I was surprised to find my guess about which way the market is going is as good as the venerated know-it-all, the Wizard of Omaha, who, it turns out, doesn't know where the market is going any more than I do, I am surprised to find the molders of Wall Street opinion, such as Mr. Kotok, supporting a change in accounting that will necessarily produce false, and misleading statements of operation, condition, and stockholder equity. A good post Mr. Mtg. Just as I was surprised to find my guess about which way the market is going is as good as the venerated know-it-all, the Wizard of Omaha, who, it turns out, doesn’t know where the market is going any more than I do, I am surprised to find the molders of Wall Street opinion, such as Mr. Kotok, supporting a change in accounting that will necessarily produce false, and misleading statements of operation, condition, and stockholder equity.

]]> By: ben22 http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-144880 ben22 Tue, 10 Feb 2009 12:32:25 +0000 http://www.ritholtz.com/blog/?p=18669#comment-144880 Mr. Mortgage, Very good post. But, for each sound statement there is this everywhere: http://www.thestreet.com/story/10462851/2/geithner-needs-to-fix-mark-to-market-rules.html I happened to come across this after reading your post here. What a joke. Mr. Mortgage,

Very good post. But, for each sound statement there is this everywhere:

http://www.thestreet.com/story/10462851/2/geithner-needs-to-fix-mark-to-market-rules.html

I happened to come across this after reading your post here. What a joke.

]]> By: JAllen http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-144866 JAllen Tue, 10 Feb 2009 04:34:19 +0000 http://www.ritholtz.com/blog/?p=18669#comment-144866 Mr. M - Great to see you back . Looking forward to more TRUTH. Again I would like to thank you for all of your quality posting last year. JAllen Mr. M – Great to see you back . Looking forward to more TRUTH. Again I would like to thank you for all of your quality posting last year. JAllen

]]> By: aypay http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-144850 aypay Tue, 10 Feb 2009 02:54:38 +0000 http://www.ritholtz.com/blog/?p=18669#comment-144850 I am sorry Mr. Mortgage but you never address what becomes of those who were saving up so they could buy a house they could afford. They are expected to pay through the nose while EVERY person with a mortgage gets bailed out? Perhaps those who take the bailouts should get liens that are issued to all the non-bailed-out taxpayers that garnish their wages until they are made whole? Because as a 33 year old, recently married family man trying to get started the right way it sure seems off that I should take it coming and going and then be forced to prop up the prices of the very houses that I need to buy. I will be the engine keeping my own dreams out of my reach. Bull. Find another way. That way needs to include the first mortgage holders who went over their heads taking a big hit. They ran the risk, and no less than the banksters they had no intention of sharing their profits on the way up. They shouldn't get to share their losses on the way down. I am sorry Mr. Mortgage but you never address what becomes of those who were saving up so they could buy a house they could afford. They are expected to pay through the nose while EVERY person with a mortgage gets bailed out? Perhaps those who take the bailouts should get liens that are issued to all the non-bailed-out taxpayers that garnish their wages until they are made whole? Because as a 33 year old, recently married family man trying to get started the right way it sure seems off that I should take it coming and going and then be forced to prop up the prices of the very houses that I need to buy. I will be the engine keeping my own dreams out of my reach. Bull. Find another way. That way needs to include the first mortgage holders who went over their heads taking a big hit. They ran the risk, and no less than the banksters they had no intention of sharing their profits on the way up. They shouldn’t get to share their losses on the way down.

]]> By: Jojo99 http://www.ritholtz.com/blog/2009/02/mr-mortgages-guide-to-the-truth/comment-page-1/#comment-144809 Jojo99 Mon, 09 Feb 2009 22:52:04 +0000 http://www.ritholtz.com/blog/?p=18669#comment-144809 Businessweek February 5, 2009 <b>Housing Appraisals: Still Blowing Bubbles?</b> Third-party appraisal managers are supposed to eliminate pressure from lenders to inflate housing values. But unscrupulous subprime players are crowding into the market By Chad Terhune Home appraisers played one of the less well-known roles in pumping up home values and contributing to the current financial crisis. Retained by lenders or brokers, they frequently colluded--explicitly or tacitly--in overestimating the worth of houses to justify large mortgages and the lucrative fees each member of the real estate food chain received at closing. Faced with investigations and lawsuits, the home-finance industry has agreed to a government-approved code of conduct for appraisals that takes effect on May 1. The new rules promote the use of middlemen between the nation's 60,000 freelance appraisers and the lenders and brokers. The middlemen, known as appraisal management companies, or AMCs, are supposed to prevent lenders and brokers from pressuring appraisers to exaggerate assessments. But among those joining the swelling ranks of this formerly niche business are some of the same subprime players that helped inflate the real estate bubble in the first place. Take NovaStar Financial (NFI) in Kansas City, Mo. A large subprime lender during the housing boom, NovaStar was disciplined by three states--Massachusetts, Nevada, and Washington--for such infractions as employing unlicensed brokers and charging unlawful fees. Without admitting wrongdoing, the company paid $5.1 million in 2007 to settle similar allegations in a class action brought on behalf of borrowers. After its mortgage business collapsed, NovaStar morphed into an AMC last year by acquiring another company and renaming it StreetLinks National Appraisal Services. ... http://www.businessweek.com/magazine/content/09_07/b4119042628146.htm Businessweek
February 5, 2009

Housing Appraisals: Still Blowing Bubbles?
Third-party appraisal managers are supposed to eliminate pressure from lenders to inflate housing values. But unscrupulous subprime players are crowding into the market
By Chad Terhune

Home appraisers played one of the less well-known roles in pumping up home values and contributing to the current financial crisis. Retained by lenders or brokers, they frequently colluded–explicitly or tacitly–in overestimating the worth of houses to justify large mortgages and the lucrative fees each member of the real estate food chain received at closing.

Faced with investigations and lawsuits, the home-finance industry has agreed to a government-approved code of conduct for appraisals that takes effect on May 1. The new rules promote the use of middlemen between the nation’s 60,000 freelance appraisers and the lenders and brokers. The middlemen, known as appraisal management companies, or AMCs, are supposed to prevent lenders and brokers from pressuring appraisers to exaggerate assessments. But among those joining the swelling ranks of this formerly niche business are some of the same subprime players that helped inflate the real estate bubble in the first place.

Take NovaStar Financial (NFI) in Kansas City, Mo. A large subprime lender during the housing boom, NovaStar was disciplined by three states–Massachusetts, Nevada, and Washington–for such infractions as employing unlicensed brokers and charging unlawful fees. Without admitting wrongdoing, the company paid $5.1 million in 2007 to settle similar allegations in a class action brought on behalf of borrowers. After its mortgage business collapsed, NovaStar morphed into an AMC last year by acquiring another company and renaming it StreetLinks National Appraisal Services.

…

http://www.businessweek.com/magazine/content/09_07/b4119042628146.htm

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