William Leonard

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    • Mon Nov 5th 14:03 PM | Rating: 0 0
      Commented on:
      How WaMu's Lawsuit Affects Countrywide Financial
      I am an appraiser. I did work for countrywide for awhile. I quite because they applied as much or more pressure than the worst in the group. Believe me, you can not control the greater market share in a corrupted system without applying corrupt controlling practices better than your competitor. In those periods, even when we complained to the state agencies of these practices we were summarily disregarded by virtue of both vagueness in USPAP and regulating appraisers that in their practices caved to the lenders in their desires to control the possibilities when they were in their private practices before becoming regulators. The majority of all appraisers appear to facilitate this type of illegal lender mentality and the practice grew worse each year as this last cycle beginning in about 2001 progressed. The industry year after year filtered and trained lending processors and appraisers that would cooperate in these illegal and preditory practices until in about 2004 the presence was epidemic. They bacame more effective and their filtering became more and more quick to kick out appraisers that would not change numbers or hit predefined numbers. I recently had an assignment from US Bank that came in low according to the corporate contact, an appraiser on staff as the reviewer. He said that I had to be wrong because the realtors involved and the buyer and the seller all disagreed with me. This is the type preditory lending that goes on. I told him I didn't know the appraisal process had now turned into a popularity contest. The appraisal was completed based on documented data and in a declining market trend. The lender called me in the field on the cell phone and by the time I got to the office I was fired from the company roster because I would not change and misrepresent the facts. My opinion is that the realtor had threatened the local loan officer that no more purchase work would be coming his way and that the realtor would make thise known as much as possible. Until the evaluation process is entirely isolated and insulated from influence and retribution improper evaluations will occurr as the rule rather than the exception. MAKE NO MISTAKE THIS PROBLEM OF SUBPRIME IS AN APPRAISAL PROBLEM. Yes it could have been mitigated by better qualifications of the buyers and borrowers but if the evaluations were correct even under those circumstances of poor credit proving the home could have been sold for a marginal loss at most but likely for enough to cover the loan and therefore no great loss to the industry. IT IS AN APPRAISAL PROBLEM, don't let the reporting mislead you.
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    • Fri Nov 2nd 12:52 PM | Rating: 0 0
      Commented on:
      Countrywide Leads The Charge In Tightening Up Loan Standards
      It appears diffficult for the entire process to actually identify this problem considering the subprime mess. The opinions, congressional actions and obvious regulatory actions are going after the symptoms as the problems rather than attacking the problem. The problem is housing evaluations at the core. The laws that were instituted to protect the financial concerns of America after the debacles of the late 1980s and early 1990s are in fact very good ones, however the lending institutions found many ways around the process and once again, illegally, came back into control as to being able to influence outcomes. Besides the outcome controls, meaning the lenders do infact control most lending evaluations to some degree as to the number that is justified in an appraisal, but also they precisely control the commentary so as not to have the very positive or negative information within the summary of any given appraisal. Here is the bottom line---if most common people off the street were given an appraisal report and guided through that process so that they understood the entire report and therefore the risk it is my opinion that likley about 70% of all loans written since late 2003 would not have been written as they were loaned on. Calculate that into a problem of the magnitude that we have now and one no longer even has a problem with the basic debt instruments. Granted the greed or appetite for profit may have not been satisfied but then most criminal activities that see profits as their goals regardless of their legal or moral justifications never are within a society that the rule of law prevails. Every appraiser knew by 2004 that the rule of law had almost completely broken down as the political pressures of increasing home ownership and the increase in stock dividends put smiles on those who flooded through the door after all of the gate keepers went home. Many will say that the appraisal process was simply a part of the problem, however they will be wrong in the end. It was the seed of the problem and the lenders knew it that is why they moved so fast by 2003 enabling all illegal practices that they could get away with to once again control the process like they had in the debacle of the late 1980s. The present law suit by Cuomo in New York is a story so huge because finally somebody gets it. Any appraiser can site those same abuses with almost evey major lender beginning in about 2003. Almost all 'so called' independent appraisal companies that were to insure appraisal independence had the lists of prefferrence from lenders. If appraisers did not hit the numbers, that appraiser was fired and the next 'dancing chicken' was brought up to the front of the line until they had a fleet of 'number hitting' appraisers that typically inflated values between 5%-20%. Just think how much better this problem would be if that single aspect was not true not mention actually being informed by appraisers as to the health of the market and the general relationship of housing values and local incomes. Heaven forbid of we actually risk managed each appraisal as intended, people would not be leaving their homes in financial ruin----but on the other hand where would we be satisfying the age old myth of huge passive returns that the illusion of all the retirement systems promised and that the baby boomers are about to finally prove impossible.
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