Money Shots: Where mortgage rates are headed in 2007

I have been a certified real estate appraiser in Illinois for 7 years. I have known since 2003 that the market was going to implode on people. The refinancing boom was a terrific thing when the markets were strong. If you were one of the unfortunates that refinanced as the market was slowing, there is a high probability you home was over-appraised and is actually worth a lot less then you think.

If you have an old appraisal. Look where the comparables were taken from. If they were taken from your neighborhood (less that .50 mile away) and the homes are similar in design and size, then you're probably still OK. If the comparables really are not similar to your home and they are considerably further away (close to a mile), there is a VERY strong chance your home was over appraised and you took on way more debt than you actually can handle.

Watch the newspapers for resent sales in your neighborhood. Find sales of homes that closely resemble your home in size and design. Remember that updating does increase value, but be realistic, if a neighbor's home is in good shape, but hasn't had a whole lot of updating, but yours has, your home IS NOT going to be worth a huge amount more. The market doesn't work that way. Your $50,000 in updating, realistically may only be worth $20,000 in the sales market, especially if it is a slow market to begin with. Unfortunately, reality is slapping a lot of people in the face very hard right not. It's usually the honest appraisers that are taking the heat for the slime appraisers that will sell their soul to the Devil for a fee.

Homeowners, the Days of Wine and Roses are OVER! You can't use your home like a credit card anymore. Your home is probably not worth what you think it is. If you believe you have been taken advantage of either by a bad appraisal, a bad mortgage broker or both. Send a copy of the appraisal and the loan to your State Department of Financial Regulation and let them investigate it.

I hope the market crashes and these greedy homeowners & real estate agents lose a bundle, the homes in Bergen County NJ and all over NJ are at least 60% overvalued, stop the greed people & builders, come back to reality!!

People need to be responsible for their credit and situation. Emergencies happen. I was laid off 12 times in 10 years and never once missed a mortgage payment nor blamed someone else for my situation.

Why not hold the federal government accountable for putting millions of people in homes that should of been renting. They allowed the current scenario to develop over the last 15 years.

There is a reason why a low credit score warrants a high interest rate. That is because the risk of default is greater compared to an individual with a higher credit score.

I am a loan officer in the Los Angeles area and November of last year, a client's property appraised for $710,000. She did not refiance at the time and would like to proceed with the process. Unfortunately, her property is now valued at $630,000.

I am a loan officer in the Los Angeles area and November of last year, a client's property appraised for $710,000. She did not refiance at the time and would like to proceed with the process. Unfortunately, her property is now valued at $630,000.

The next big problem in real estate will be the realization that many appraisals are bogus.
Way back when banks were the only lenders they would hire an appraiser who would come out and appraise the property with the bank's best interest at heart. Nowadays the appraiser comes under a lot of pressure from real estate agents and prospective buyers and even sellers to appraise the property at the sales price or better to facilitate loans from mortgage companies who could care less that they are not legitimate since they sell all their loans to investors.
Soon enough this will all blow up and everyone will be pointing fingers at the poor appraiser who only did what he was badgered to do.

SHAME ON THE MORTGAGE COMPANIES!!

YES MANY HOME OWNERS WILL HAVE TO FORECLOSE ON THEIR HOMES ,BUT LETS LOOK AT THE REAL CULPRIT. 'THE MORTAGE COMPANIES!!!' DO ANY OF YOU THINK THESE LENDERS WHO GAVE OUT THE SO CALLED SUBPRIME LOANS DIDNT KNOW THAT THE BORROWERS WOULDNT OR COULDN'T PAY THE LOAN IN THE FIRST PLACE?.
SURE THEY DID, BUT AS USUAL THE BLAME GOES TO THE BORROWER ,NOT THE LENDER. IF THE LENDER WAS HONEST WITH THE BORROWER AND EXPLAIN THE FINE PRINT ,BETTER YET TOOK OUT THE FINE PRINT, MANY HARD WORKING AMERICANS WHO WANTED TO BUY THEIR FIRST HOME WOULDNT HAVE THIS GROWING PROBLEM.
HERES WHAT HAPPEN ,IN THE LAST 5 TO 10 YEARS ,GREEDY INVESTORS SPENT MILLIONS OF DOLLARS OF OVER DEVELOPEMENT OF NEW HOMES THEY BUILT TO RAKE IN TRIPLE THE AMOUNT THEY SPENT TO BUILD THESE HOUSES. TO COVER THEIR LOST, BECAUSE NOBODY ,UNLESS YOUR VERY WEALTHY WOULD SPEND THE KIND OF MONEY THAT THESE INVESTORS WANTED ,SOME CLOSE TO A MILLION OR MORE DOLLARS FOR THESE HOUSES. HERES WHERE THE LOAN COMPANIES COME IN ,THEY MAKE DEALS BACK AND FORTH WITH SOME BANKS AND INVESTORS ,ALSO IN ON THE LEGAL SCAM AS WELL TO COME UP WITH UNCLEAR SCRIPT ,CONTRACTS,POLICY AGREEMENTS TO CATCH THE BIG FISH- "you!" (the amercian citizen). and when you cant afford to make that mortgage payment ,they dont lose ,they have your house and the money you paid already in late fees etc. your foreclosed home is then moved to some other bank or investor whos looking for another fish to reel in. i should say that the government should step in on this legal scam ,but i almost forgot they are in on it as well. the same thing with the gas or oil scam ,blaming the war and tensions with the middle east to jack up the oil prices protecting the big oil companies etc. its time that we educate ourselves and protect our wealth against greedy investors ,banks etc ,because the government protect them ,not you! im not anti government ,however this is real ,you better wake up
america!!

please pass this on and share your thoughts with me and others...

The comments about many appraisals being bogus is reality. I do review appraisal work for a major mortgage wholesaler. They comes to me when their underwriters believe there is something wrong with an appraisal. 75% of the reviews I do are out and out fraud. 25% are legimate appraisals and perhaps were very difficult assignments and had to go beyond standard guidelines.

Pressure from loan officers is ever increasing. The sub prime market is getting smaller and smaller. Small appraisers are being squeezed out. They have no choice but to stretch a value to please a client so they can remain working. Nothing happens to the mortgage broker that puts pressure on the appraiser, the appraiser is the one who takes all the blame.

My ethics and my license is not worth a $300 fee for an appraisal. I give the honest value as many appraisers do. It's just the bad guys make the life of the good guys very very difficult.

Why do we buy in to this low credit score, high interest rate scam that is destroying America? Subprime loans - like credit card rates of 30% (clearly usury) - are loaded on the shoulders of those who can least afford it. And the rationale is ridiculous. If borrowers are high risk at the normal rate of interest, doubling or even tripling that rate is obvioulsy going to make them an even higher risk, and ultimately push them over the edge altogether. No, it seems to us that the purpose is to make indentured servants out of the majority of Americans. Literally, we are coming to owe our souls to the company store. And the company store, i.e., corporations/banks, are coming to own the soul of America itself. As we see it, the banks absolutely MUST be regulated once again. But in order to get a war fund to be elected, our Senators and Congressmen have come to owe their souls to Big Business, and the average citizen has absolutely no real protection against soulless corporate greed, a greed so unrestricted and out of control that it is moving America toward Third World status. Our Founding Fathers must be spinning in their graves.

Is it better to remodel an old home? If it is already paid for? Which area or lending instituion is better to borrow from or are there agencies to get money for repairs

Hi Mary,

Depends on whether you have equity in your home or not! If you have some equity you probably can get yourself a home equity loan or home equity credit line, which is secured by your property and would have a second lien on your house, but it is tax deductible, just as your first mortgage is, interest wise that is.

I don't know how long you have owned your home, or if you even have a mortgage on it, or if its been appraised recently, but there are many ways that remodeling and repairs can be accomplished, tied to your house.

Well I believe everyone is just not going to own up to paying their bills and mortgage payments as they should. I been making mortgage loans for 20 years and sub-prime loans have very specific guidlines and conditions to meet. Its the customers responsibility to make their payments on time and the loan docs clearly say what the terms and conditions are. The loans that have been made in the subprime market are fair loans to people that showed underwriters the ability to repay their loan. People that are going to foreclosure have not kept their credit in good standing since they bought their home or have lost jobs and have lost the ability to pay their debt on time. Well I guess it the mortgage companies fault. (Not)

I know we should not give the hard working american a chance to own homes and make it just affordable for people who can put 20% down with a 680 or above score. (thats fair to the average hard working Joe)

Banks and mortgage companies dont get rich on foreclosures that are 1 yr old on 100% no money down loans!!

I guess you should sit with a Mortgage banker for a year and see if we make fair loans.

We dont make loans to people that dont qualify for programs!!!! The get Denied. Yes Denied all the time!

Oh yea we make loans for the heck of it. (come on)
(not)Get real people!! Pay your bills !!!!

If you cant dont blame everyone else. Boy thats kind of easy.

Appraisers must adhere to their guidelines just as other professions do. If they our outside the normal adjustments for an appriasal they get hammered by the underwriters to get more accurate comparbale sales of home like yours in the last 12 months in your area. The appraisers that give inflated appraisals get nailed by underwriters everyday and our adjusted by lending standards all the time if they are outside the box.

Shame on the people that think its all the Mortgage companies fault!!!!

We just make loans to anyone. I think I would be a wealthy man if that were the case. We make loans knowing the customer is not going to pay. Thats absured!!!

We qualify the customer based on credit history and income and other factors.

They have to have some good repayment history and a credit score that reflects this record to get a mortgage loan.

Thanks John for some good ole common sense about this issue!

Should people take out Mortgage Life Insurance,when
they purchase a house. In other word if a husband or wife passaway the house gets paid off thru the Mortgage Life Insurance that they have paid into. And who are the better Mortgage Life Insurance Company to deal with, if people should go with this deal. Thank You

CEO's profiting in the millions

Workers at the bottom of the pile earn around $7.00 hr

Workers in the middle of the stack, If lucky $16.00 hr

House prices: $200 K and beyond, add to it taxes, utilities, transportation, etc. etc.

I am going back to Italy !

Steve H,
Perhaps you are an honest loan officer and bravo to you for that. But I work in a subsidiary of the mortgage business, I work in the title business and I do many many closings as settlement agent of many of these loans. Some loan officers, and I will not speak to a percentage other than to say, I've heard this from multiple loan officers, do not care if the borrower can pay back the mortgage. They don't care because they get paid when the loan closes or funds and do not lose their commission if the borrower breaches a year later. As such, certainly loan officers were happily making loans to people who could not pay them back and were making a bank off of it. Countless times I went to closings only to be told "Thats a higher % rate than he told mejust yesterday...but I guess I have no choice". As I started..bravo to you if you are an honest broker Steve H...but I believe you are the exception..not the rule.

Local taxing districts are quiet about all this if anyone has noticed because of their vested interests.As overinflated values rose so did their revenue from property taxes. They could care less with all the money coming in at higher valuations. It is also interesting to note that these loans are never calculated to see if the borrower can make the payments at the higher rate. This inaction is predatory since the vast were known to only qualify at the teaser rate.

Credit scores SUCK, how dare everything we do or need depend on our credit scores, my hubby is the hardest working man I know, yet he was laid off a job he held for 12 years 5 years ago, well we went into a tailspin for the next year and our "credit" was ruined, this is all bullshit, our government is all bull too, the market is still a joke and I LOL when I see it is supposed to be a buyers market right now, it will NOT be a buyers market until the dam home prices get rolled back to 10 years ago and before, totally absurd is what home prices are still!