Waivers, huh?

[George Hatch]

"Appeal to motive" explains the history of mortgage lending after securitization allowed everyone to offload their risks onto an unsuspecting bond market. "Appeal to motive" explains why the major lenders shopped rating agencies, auditors, and valuation providers to see which ones offered the least resistance to their "motives". All of which recently resulted in the biggest financial crash since the Great Depression. We are supposed to trust them now?

Those are examples of misconduct, but not examples of the fallacy of the appeal to motive.

An example of appeal to motive is when someone replies "why are you asking that question - you must have bad intentions". The question or statement or opinion is discredited as a bad faith argument being based on the individual's motivations which are presumed to be evil in nature.

Like when djd and others accuse me on a public forum of being a paid shill (or unpaid shill) of the GSEs or AMCs or the lenders as a means of discrediting my comments in order to avoid responding to the content. As if the facts therein don't exist.

I am nobody's accomplice. But even if I was it doesn't alter what the observed conduct is among these various parties, why these decisions are being made and how they are being allowed by the govt to do these things. Whatever those facts actually are, they exist independent of my motivations or anyone else's motivations. So even if I was operating in bad faith or I was advocating on behalf of these lenders and AMCs and against appraisers - which I'm not - that wouldn't change any aspect of this discussion.

appeal to motive is a fallacy as well as a bad faith argument or response to the issues as they actually exist. Not to mention inherently dishonest in nature.

 

[djd09]

Government's role as a regulator in these areas of commerce is both necessary and
appropriate, given the magnitude of the lending business and its impact on the
taxpayers. I would go so far as to suggest that it was the *failure of the
federal government* to enforce the existing laws and regulations that has
enabled the misconduct of the lenders and its resulting aftermath. To be sure,
those failures continue to this day. The whole purpose of requiring the
lenders to engage in the various forms of due diligence - including obtaining
impartial and unbiased appraisals - is to protect the public's interests. Any
compromise that undermines the intent behind those requirements also undermines
both the public's interests as well as the public's trust in government.

 

[George Hatch]

I believed it then and I believe it now. I don't waver.

Even if I did waver, you don't have what it would take to catch me at it. Me taking note of the IRL conduct does not amount to an endorsement or advocacy of it.

 

[djd09]

just remember...not one gse employee went to jail for the financial crisis after they help pillage and plunder vast amounts of real estate

 

[George Hatch]

In my view if the govt had been doing its job the financial crisis would have never occurred in the first place. Actually, I take that back - if the govt hadn't *prompted* the lenders to be more lax with their underwriting the financial crisis would never have occurred in the first place.

 

[djd09]

its better now...the scum bag mortgage broker estimates value via waiver with the gse blessings

 

[George Hatch]

One less source of problems. Some improvement is better than no improvement.

And IRL, it's: broker internal AVM estimates value via waiver with the gse blessings, but only up to 80% LTVs.

That is, in case you were ever interested in discussing the issue on the factual basis instead of just freebleeding all over the place.

 

[Terrel L. Shields]

Those fixed costs continue regardless of whether or not they're generating the volumes it takes to pay them.

The banks still have costs. And if small banks can afford to do it themselves, then why not big ones. I mean is economy of scale thrown out the window?

 

[Mike Ault]

One less source of problems. Some improvement is better than no improvement.

Yes, the previous "realtor select" and "builder select" (a.k.a. "mortgage broker select") appraisal process – sucked. That was the autobahn to mortgage fraud.

 

[George Hatch]

Yes, the previous "realtor select" and "builder select" (a.k.a. "mortgage broker select") appraisal process – sucked. That was the autobahn to mortgage fraud.

Another way to put it is that the lenders previously had some built-in plausible deniability for using aggressive appraisals. They could claim to have been cheated and lied to by the MBs, and claim to have no way of knowing these appraisals were out of line. They can still attempt to make that claim with the AMCs except this time they have selected and are paying the AMCs themselves and are making the effort to keep the appraisers away from the LOs. The AMC play is not quite as direct a line of accountability, but it's still a far step further than what existed before.

If the lenders had played it straight with the MBs and those appraisals to begin with, the HVCC and D-F would have never happened. Might not have, anyway. The point people seem to be missing is that I DON'T believe the lenders are inherently more moral as a group than the MBs; but rather far easier to monitor and hold to account for their actions due to the much smaller number.

Appraiser independence (from the loan origination function) regulations at the lenders would never have been necessary if the lenders could have been trusted to act appropriately on their own WRT supporting appraiser objectivity and impartiality. Some did, some didn't. The regs were aimed at cutting down on the misconduct at the lenders which weren't acting appropriately on that issue.