Every 10 Years: History Repeats Itself

[Julio E. Sune Jr. (FL)]

Source: USA Today...[Money Section]
Date: July 14, 1998

Problem Loans: "Unsettling" number of banks are risking trouble by relaxing lending standards, the nation's top banking regulator warned Monday. "The problems we are seeing in the banking industry today are serious", acting Comptroller of the Currency Julie Williams said. "They could presage the same kind of problems that afflicted the industry nearly a decade ago". Many banks were besieged by bad loans during the late 1980's, creating a crisis that led to bank failures and goverment bailouts.

Sort of Deja Vu......isn't it??????
Was something learned during the past 20 years???
I think not...
Will something change????
Looks like "greed" again will prevail.....

 

[GCJim]

Lenders one day are going to cause a complete collapse of the US economy due to lax lending standards, and maybe soon. I am seriously coming to the conclusion that appraisers need to be vested with some degree of government authority. Who better to observe the different aspects of real estate transactions from a unique perspective? We investigate (or are supposed to investigate) every aspect of the transaction, including aspects of the sale, when applicable. Like Federal Aviation Admin inspectors---they can quickly shut down an international airline. Or like municipal building and zoning inspectors-----they can quickly shut down a construction site or a business operation (and in the process, cost you a BUNDLE. Ever see a contractor waiting for the building inspector to arrive? Or better yet, during the inspection? Some serious sweating and respecting going on there...) Who gets a better look at a real estate transaction from all sides?

If real estate is that important to the US economy, we should not settle for less. Yes, I have seen the headlines for government officials on the 'take'. The difference is, the news is usually front page local headlines for these types of crimes by government officials, not buried somewhere, and these folks usually go to prison when they get caught.

I won't hold my breath, but one can dream, can't one?

 

[Pamela Crowley (Florida)]

Thank you, Julio! I keep telling the current batch of reporters that it did start well before 2001, but it appears that they don't want to hear that.

GCJim, are you suggesting appraisers need to be the "Real Estate Police"?
If so, we better start licensing and certifications all over again. Way too many now that are already certified, but really qualified.

 

[Jim Hill]

History does repeat itself in many ways.

When you compare the times we are in now with the S& L Scandals there are many common themes that appear to have happened in both cases.

Lenders were calling the shots and making many of their own rules and once again the goverment did not act until it was to late for many banks and other lenders.

My question is was this all done with the intend to defraud in the first place?

I believe the answer was yes and then they started blaming it on a bad real estate market and the goverment rules and a number of other things.

What happened then and now is FRAUD. The problem is if they really wanted to go after the people behind this they would be going after some of the largest and most powerful companies in the lending business and I don't think they have the nerve to do it.

One thing we all most remember is many people in the lender industry don't want things to change because they are making millions of dollars and they like the current system just fine.

Many of these same people talk about reforms and new rules and changes but really why would you change a system where you are getting away with fraud and making millions.

I think the New National Valuation Serivce is a big step in the right direction but I know many lenders will fight this new approach because it just might take money out of there pockets which is something I don't think they really want.

Lenders are in control and why would they want to give that up?

When you can play a round of golf with your buddies and make deals that make you millions who would want to change that?

If you have some time read a few good books on the subject such as The Big Fix Inside the S & L Scadal and the Daisy Chain and then ask yourself who is really running the show!

Just my opinon. Jim Hill

 

[Mike Garrett RAA]

Just remember..."It's ALWAYS the appraiser's fault!".

 

[Kevin Mc]

Just remember..."It's ALWAYS the appraiser's fault!".

Yup. Heaven forbid the jackass Senators who are sponsoring the Bond Bill actually sat down with some appraisers and discussed what is truly happening in the lending process. They won't. It isn't financially prudent for them to bring the lending industry to task. They hold press conferences, point their fingers and then go about their day shaking hands and kissing babies while Rome burns. Greed rules, always has, always will.

 

[Blueprint]

Of course greed will again prevail. Prevalence of greed is cyclical much like the economy is cyclical. Some are suffering today and others will be suffering in the near future. Some will learn from their mistakes, most will never suffer enough to be permanently affected by this downturn.

 

[VolcanoLvr]

"What happened then and now is FRAUD. The problem is if they really wanted to go after the people behind this they would be going after some of the largest and most powerful companies in the lending business and I don't think they have the nerve to do it."

Mr. Hill's post is partially on track, were it not for Andrew Cuomo and his lawsuit against an AMC, a major lender and the GSE's.

The result of that was the GSE Agreement and the HVCC. Despite what you feel about these, and tweaking that's necessary, they are part of the solution to solve the inherent problems with the lending industry. The Dodd/Crowley IVPI Proposal was a component that allows appraisers to function properly in the grand scheme of things.