David C. Johnson
Senior Member
- Joined
- Jan 15, 2002
<span style='color:darkblue'>ksappraiser, Pamela, TC, Oregon Doug & Ray Ohler:
First, ksappraiser:
Real Good post (in my opinion). Thanks for posting it.
I liked your accounting exercise in your second post of the thread. But you left out the influence of PMI (Private Mortgage Insurance) which further supports your case.
Pamela:
"The Appraiser is the Mortgage Insurance through your E&O!!!"
Well Said! In fact, somewhere in the arrangement will be the specific language stating that the appraisers they are looking for MUST have E&O Insurance -- I guarantee it. However, again, do not forget about PMI, which is absolutely required in any such loan-to-value ratio (i.e., any LTV higher than 80%). The lender, if no one else, appears very well protected indeed.
It would be my guess that rates and terms for PMI are going to become unusually "User-Unfriendly" starting in the near future, which will hinder homeownership (thereby performing in direct conflict with FNMA's & FHLMC's Original Congressional Charter). This will be most significant to the most needy of our society -- fortunately, they are also the least powerful and least knowledgeable, so there should not be a whole lot of noise. It will also increase foreclosures substantially in the country. (Remember: The lender "gets the house" in addition to a guaranteed income stream during all of the foreclosure proceedings due to PMI, Right?) There have also been some very significant changes in Federal Bankruptcy Laws recently -- long pushed for by lenders -- that, I suspect, factor into the equation in a very favorably manner for lenders. Remember, ANYTHING that lending community devises should be considered more than suspect from a "health of the country" perspective -- No exceptions. Now, even the secondary market is Especially and Specially Privatized (while still, most Americans appear not to be aware of this fact). Lenders evil? Nope, not at all -- merely finding themselves minding the store all alone these days -- with no effective checks or balances at all. But remember: They are simply doing their jobs -- to minimize risk and maximize gain -- as required by law. Note: Are/Were we the check and balance?
The Name of the Game for "free enterprise" in the 21st Century has been Chipped in Stone as follows: "Socialize the Costs, Privatize the Profit." This also means: "Socialize the Risk, Privatize the Reward." Simple as that. True, the rich get richer while the poor get poor has been our unspoken motto for many, many years in this country, but now it has Drastically Changed: Now, it is going to be happening MUCH QUICKER. Self-destructive behavior from a national survival perspective? You bet. But, how is that really so important so long as I get what is coming to me and at least part of what is supposed to go to you. Get it?
PMI rates will be going up for another reason. Part of the tremendous overcharges in PMI premiums (specifically being that part that has not gone into PMI company stockholder's or owner's pockets or lender's or stockholder's pockets, who often own the PMI companies in one way or the other) paid needlessly by hundreds of thousands of American homeowners for several decades, has in fact, been cycled back into the system -- thereby lowering the cost of this insurance for new home purchasers. Note: historically, many or most homeowners with PMI have continued to pay many tens of thousands of dollars LONG AFTER it was necessary for them to continue to do so -- because they were not told they could discontinue PMI, let alone how to do it. Unlawful? No, Sir -- completely in keeping with an interpretation of the any existing law at time (i.e., actually there was no law specifically addressing the issue). This huge extra, unearned source of (now officially unlawful) funding will be drying up gradually over time due to a fairly recent Congressional requirement for mandatory yearly disclosures made to homeowners as well as an automatic elimination provision occurring at a specific point in the amortization process for PMI. (The fastest growing segment of mortgage borrowers these days get PMI attached to their mortgage payments.) This will have to be made up for somewhere, ergo, higher PMI premiums and longer PMI terms. Not to worry, most Americans (particularly the unsophisticated, which is the prime market, and also, by far, the largest market in this case) do not shop for price, they shop for monthly payments -- just like new car buying. It's the American way.
TC:
"...I personally would not consider this kind of work,
but I am sure there are plenty of "appraisers" signed
up and ready to go..."
Yep, no doubt about it. It only takes a few state-licensed / state-certified individuals to make it fly. He/she may become rich, but, at very least, will survive in the profession / industry, where others (who turn down such deals) have no such assurances. Penalize the unquestionable, Reward the questionable.
Oregon Doug:
Did you intend to be responding to ksappraiser with your post?
Ray Ohler:
"...the stuff that's being foreclosed on THESE days wasn't
worth $100,000 to begin with. It was "probably", "may have",
"allegedly", "could have been" only worth $70,000-$75,000..."
Real good point.
____________________________________
All just my opinions...
Regards,
David C. Johnson, Raleigh, NC
www.pmirescue.com
PS: We developed the PMI Threshold Calculator -- an invaluable aid to many thousands of homeowners, including appraisers, to figure out when one's PMI burden has been reached. (We also coined the term "PMI Threshold Value," a term which is now even used by the PMI Industry itself.) The website is an excellent source of information for appraisers to know about -- including the calculator. For years we have refused to charge homeowners for its use. Since inception, we have not received so much as a single negative comment from a purchaser of the information and instruction package we offer. Incredible. We consider the effort to be a self-perpetuating public service. It is.</span>
First, ksappraiser:
Real Good post (in my opinion). Thanks for posting it.
I liked your accounting exercise in your second post of the thread. But you left out the influence of PMI (Private Mortgage Insurance) which further supports your case.
Pamela:
"The Appraiser is the Mortgage Insurance through your E&O!!!"
Well Said! In fact, somewhere in the arrangement will be the specific language stating that the appraisers they are looking for MUST have E&O Insurance -- I guarantee it. However, again, do not forget about PMI, which is absolutely required in any such loan-to-value ratio (i.e., any LTV higher than 80%). The lender, if no one else, appears very well protected indeed.
It would be my guess that rates and terms for PMI are going to become unusually "User-Unfriendly" starting in the near future, which will hinder homeownership (thereby performing in direct conflict with FNMA's & FHLMC's Original Congressional Charter). This will be most significant to the most needy of our society -- fortunately, they are also the least powerful and least knowledgeable, so there should not be a whole lot of noise. It will also increase foreclosures substantially in the country. (Remember: The lender "gets the house" in addition to a guaranteed income stream during all of the foreclosure proceedings due to PMI, Right?) There have also been some very significant changes in Federal Bankruptcy Laws recently -- long pushed for by lenders -- that, I suspect, factor into the equation in a very favorably manner for lenders. Remember, ANYTHING that lending community devises should be considered more than suspect from a "health of the country" perspective -- No exceptions. Now, even the secondary market is Especially and Specially Privatized (while still, most Americans appear not to be aware of this fact). Lenders evil? Nope, not at all -- merely finding themselves minding the store all alone these days -- with no effective checks or balances at all. But remember: They are simply doing their jobs -- to minimize risk and maximize gain -- as required by law. Note: Are/Were we the check and balance?
The Name of the Game for "free enterprise" in the 21st Century has been Chipped in Stone as follows: "Socialize the Costs, Privatize the Profit." This also means: "Socialize the Risk, Privatize the Reward." Simple as that. True, the rich get richer while the poor get poor has been our unspoken motto for many, many years in this country, but now it has Drastically Changed: Now, it is going to be happening MUCH QUICKER. Self-destructive behavior from a national survival perspective? You bet. But, how is that really so important so long as I get what is coming to me and at least part of what is supposed to go to you. Get it?
PMI rates will be going up for another reason. Part of the tremendous overcharges in PMI premiums (specifically being that part that has not gone into PMI company stockholder's or owner's pockets or lender's or stockholder's pockets, who often own the PMI companies in one way or the other) paid needlessly by hundreds of thousands of American homeowners for several decades, has in fact, been cycled back into the system -- thereby lowering the cost of this insurance for new home purchasers. Note: historically, many or most homeowners with PMI have continued to pay many tens of thousands of dollars LONG AFTER it was necessary for them to continue to do so -- because they were not told they could discontinue PMI, let alone how to do it. Unlawful? No, Sir -- completely in keeping with an interpretation of the any existing law at time (i.e., actually there was no law specifically addressing the issue). This huge extra, unearned source of (now officially unlawful) funding will be drying up gradually over time due to a fairly recent Congressional requirement for mandatory yearly disclosures made to homeowners as well as an automatic elimination provision occurring at a specific point in the amortization process for PMI. (The fastest growing segment of mortgage borrowers these days get PMI attached to their mortgage payments.) This will have to be made up for somewhere, ergo, higher PMI premiums and longer PMI terms. Not to worry, most Americans (particularly the unsophisticated, which is the prime market, and also, by far, the largest market in this case) do not shop for price, they shop for monthly payments -- just like new car buying. It's the American way.
TC:
"...I personally would not consider this kind of work,
but I am sure there are plenty of "appraisers" signed
up and ready to go..."
Yep, no doubt about it. It only takes a few state-licensed / state-certified individuals to make it fly. He/she may become rich, but, at very least, will survive in the profession / industry, where others (who turn down such deals) have no such assurances. Penalize the unquestionable, Reward the questionable.
Oregon Doug:
Did you intend to be responding to ksappraiser with your post?
Ray Ohler:
"...the stuff that's being foreclosed on THESE days wasn't
worth $100,000 to begin with. It was "probably", "may have",
"allegedly", "could have been" only worth $70,000-$75,000..."
Real good point.
____________________________________
All just my opinions...
Regards,
David C. Johnson, Raleigh, NC
www.pmirescue.com
PS: We developed the PMI Threshold Calculator -- an invaluable aid to many thousands of homeowners, including appraisers, to figure out when one's PMI burden has been reached. (We also coined the term "PMI Threshold Value," a term which is now even used by the PMI Industry itself.) The website is an excellent source of information for appraisers to know about -- including the calculator. For years we have refused to charge homeowners for its use. Since inception, we have not received so much as a single negative comment from a purchaser of the information and instruction package we offer. Incredible. We consider the effort to be a self-perpetuating public service. It is.</span>
