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As a professional appraiser, do you agree with this OP-ED?

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moh malekpour

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May 25, 2002
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California
Bet the House on It

I think any appraiser who is in the real estate market should have an opinion about the market locally and/or regionally.

THE economy faces a vicious downward spiral of foreclosures, declining property values and mounting losses on mortgage-backed securities and related financial assets.

The resetting of interest rates on more than 2 million subprime loans will prompt a large number of foreclosures, perhaps a million a year in both 2008 and 2009. These huge waves of foreclosures will depress the price of residential real estate still further. Plummeting real estate values and escalating foreclosures will cause further losses on mortgage-related securities and will further burden American consumers already dealing with higher energy prices and substantial debt.
 

Lloyd Bonafide

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The Bush administration’s plan for a voluntary freeze by lenders on interest-rate resets for a small fraction of subprime loans has been judged inadequate by the financial markets. Bolder measures — a temporary moratorium on foreclosures on subprime owner-occupied homes, a freeze on interest rate resets for subprime adjustable rate mortgages, and federal funds to help at-risk borrowers to stay in their homes and at-risk communities to reduce foreclosures — are required to contain the potential damage to the overall economy from the crisis in the housing and mortgage markets.

— Laura Tyson, a professor of business and public policy at the University of California, Berkeley, and the chairwoman of the Council of Economic Advisers from 1993 to 1995.

I think all of these are bad ideas. It would be better if the government stays out of this mess, or else we will probably have an even bigger mess. Let borrowers attempt to deal directly with their lender if they need relief. After all, lenders do not typically want to foreclose on properties if they can avoid it.
 

Ariba

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Feb 8, 2004
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Colorado
I think all of these are bad ideas. It would be better if the government stays out of this mess, or else we will probably have an even bigger mess. Let borrowers attempt to deal directly with their lender if they need relief. After all, lenders do not typically want to foreclose on properties if they can avoid it.

I say let them foreclose.

Why would any borrower going into foreclosure want to safe their house? Why not let the bank foreclose on the property and buy the house back, most likely from the same bank, for $0.50 on the dollar. Most of these borrowers have no equity in the property to begin with or money in their savings account.

I recently appraised a property that was appraised in 2003 for $170,000, the homeowners subsequently spent $10,000 remodeling. The homeowners wanted to refinance because of their adjustable mortgage was about to reset. Due to the high rate of foreclosures in the subject market area my appraisal came in at $90,000.

Putting your appraiser hat aside, if you had to make a recommendation to the homeowner what would it be? Stick it out or walk way.

Guess who President Bush is really protecting? Is it the homeowner, banks, investors, etc?
 

Terrel L. Shields

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Arkansas
I seriously doubt bolder measures will change the outcome. The problem is that there are a lot of properties that the occupants cannot afford because they are much more house than they can realisitically service debt on. That doesn't matter if they are 1% loan or 10%, the result is the same. The monthly payment is too much. The oversized house also means higher taxes, higher insurance, and higher utilities...the triple whammy that a lot of buyers overlooked.

I suspect the spiral down will be amongst the middle class. The "economy" [i.e.-Wall Street] is making money overseas and will be selling cheap property and investments to the Oil Shieks and Chinese adventure capitalists....the money arbitraged is sucked from the middle class of America.
Guess who President Bush is really protecting?
No one but George. He wants to push the worst of this mess off into the next administration so that he won't remembered as the President who screwed it up...like Carter got labeled with for 18% interest rates. He will delay action because 'action' means 'pain' in this instance.
 

wickedness1

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Jul 12, 2007
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Ohio
From what I've heard, HUD has a huge amount of properties that have never even hit the open market yet from the last several years. I've heard that HUD's been "sitting" on them so that the market isn't "flooded" even worse than it already is with bank owned properties.

Imagine if HUD released all of their properties into the open market all at once..I bet property prices would fall to half of what there at right now in the depressed area especially.
 

Lee in L.A.

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Jan 24, 2002
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Bolder measures — a temporary moratorium on foreclosures on subprime owner-occupied homes, a freeze on interest rate resets for subprime adjustable rate mortgages, and federal funds to help at-risk borrowers to stay in their homes and at-risk communities to reduce foreclosures — are required to contain the potential damage to the overall economy from the crisis in the housing and mortgage markets.

The last part of that piece is just nuts. Let the nonpaying people stay for free a few more months or years? Peeing on the bonfire, hair of the dog. Ain't gonna work. :rof:

Market flys too high, too close to sun.
Wings burn, flight is over, back to earth.
There's no escaping it. :fiddle:
 

murray stroupe

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Apr 27, 2005
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General Public
State
Tennessee
Re

I think all of these are bad ideas. It would be better if the government stays out of this mess, or else we will probably have an even bigger mess. Let borrowers attempt to deal directly with their lender if they need relief. After all, lenders do not typically want to foreclose on properties if they can avoid it.
======================
And good topic discussion,
don't know about their predictions about for closure.

But a few good things have come thru [email protected] Berkley, but that's not among them.Questionable, silly title of article.
 
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