so they sign, while lowdly cursing the mortgage broker

Sounds like a combination of ‘loudly cursing’ and ‘lewdly cursing’. As you would .

As I did many, many years ago when a similar scam was pulled on me (in Australia) by a ‘household name’ finance company. Their “only appraiser” was “sick” for weeks, and they “wouldn’t accept any other authority” for a mortgage loan, so due to time pressure I finished up having to get a personal loan instead of a second mortgage. 9.5% difference in rate, and the b*stards took a lien on the property anyway.

Fortunately there was some money coming into my family shortly afterwards from an estate settlement, and the beneficiary was willing to give me a private 2nd mortgage as soon as this arrived, so I could afford to just pay the gouge for 2 or 3 months and then repay in full. When I did the branch manager who had tried to screw me had the hide to comment that the company didn’t make any money on loans paid off that quickly (since personal loans had zero prepayment penalties). I replied that if they had given me the 2nd mortgage loan I had originally arranged, I would have run it for the full 10 years. Silence.

Bark chips were tastefully covering the meticulous landscaping in the backyard. But, as I discovered after stepping in dog-sh#t, it was merely a thin veneer hiding reality from view. My disgust was merely intensified by finding there were plenty of scented candles available (always in groups of three), but no soap, no toweling, no TP anywhere.

To me, it’s a metaphor for the whole real estate world in the West. Everything is made to look like a Pottery Barn magazine ad vignette to keep reality from view. I imagine realtors chanting, “Perception is Reality” as a nightly mantra. Well, blogs such as this are starting to let the sun in where the sun don’t shine and it’s mighty ugly. If the masses ever wake up, they’re going to freak. But I’m not convinced that’ll ever happen.

For that to happen, lenders will have to stop lending to dogs and the dead. Smaller down payments and a greater percentage of debt to equity are VERY long term trends. It may roll back a bit during corrections and crashes, but I doubt we’ll ever get back to a general feeling of “2 kinds of debt: Bad debt, and worse debt.” Any hint of trouble and the Fed goes from wildly pumping the money supply to insane levels of pumping and 1% rates. So there’ll always be players out there willing to lend. And it will stay that way until the loan risk sticks with the person who makes the loan. But NO ONE seems interested in that.

Very strange indeed.

It’s more than that..

Blogger real estate insiders such as SoCalMtgGuy, OC Appraiser, SOCALAPPRAISER, Loon Officer, Sensible Lender, subsonic22, wiseguy, and many others have done a tremendous service in providing helpful tips, information, insights, and observations into the workings of the real estate market.

And, it is IMHO, that blogs such as these are in fact ‘the wave of the future’.

6xxx E Paseo Rio Verde AH listed about 6 months ago for $687K, dropped to $674K, then relisted at $649K. It recently sold for $610K.

6xxx E Camino Correr AH listed a few months back for $799K. It recently sold for $650K.

6xxx E Paseo Rio Verde AH listed several months ago for $799K. It was taken off the market and relisted recently for $729K.

I also noticed that the for sale signs have been coming down quickly. I always wonder for a few months if it sold, or if they were just testing the market. My friend Zillow always lets me know!

This is a pretty nice area, and so I know there is hope for us all!

VirtualChris-OC

My bank hires independent fee appraisers, typically very small or one-man offices. The appraisal order comes from a central department and the loan officers cannot contact the appraiser. The appraisers work is reviewed and monitored over time and the appraisers get regular consistent assignments.

The advantage to the bank in this arrangement is obvious. The advantage to the bank’s customers is that they are getting a fair market appraisal which is important when purchasing a home. Several times in the sellers market in 2004-05, I had appraisals come in low. Each time, I gave the appraisal to the customer and asked them to drive the comparables. Each time, they agreed that they over-offered and cancelled the contract. They all were very thankful and happy, found a new house, and bought it for a better price.

Most people did not know that they overpaid in the last few years because of the situation described regarding the relationship amoung RE agents, mortgage brokers and appraisers. Many RE agents refer their customers to mortgage brokers who get the deal done, even when not in the buyers best interest. I see constantly, buyers/borrowers paying high rates and fees to mortgage brokers when they could have a better deal from a bank such as mine. A very large percentage of agents really do not care if their clients get a good mortgage deal. Many of them prefer the kickback. It is very important for people to shop lenders.

I am not afraid of rate shopping because my bank beats the competion most of the time. The other problem is the advertising that promises a rate and borrowers just can’t get it. My favorite escrow person tells me stories of people at her desk signing loan docs with rates and fees much higher than promised. They are down to the wire and need to close their purchase, so they sign, while lowdly cursing the mortgage broker.

When you shop, look at the rate, how long it is fixed, when it changes, the size of the margin, the prepayment penalty, direct lender fees, points, rate lock period. What you want is no points, no pre-payment penalty, a 60 day rate lock (at no additional fee/same rate), rate and payment fixed for 7,10 or 15 years, low direct lender fees, a lender that keeps all of its loans, no rate or fee add-on for: condo or high rise condo or low doc, same rate for loans up to $2 million. I know a bank that has these……….

Good work on your honest evaluation of the appraisal business.
Zillow is just a comparison tool at this point. I would not use this as your only evaluation of value. An on site investigation is definitely needed as the oc appraisor notes.