Valuation Guy

2 Comments

Did Inaccurate Credit Scores Cause Subprime Crisis? [view article]
credit scores were not the problem-scores like FICO & Vantage Score predict the likelihood that a consumer will repay their debt - not their ability to repay their debt. The single greatest cause of this mess from the lenders standpoint was the lax underwriting guidelines and the lack of income/asset verification. Mar 25 07:35 AM
Preventing the Next Mortgage Crisis [view article]
you made some excellent points but one additional suggestion needs to be an over-haul of the appraisal practice; for too long lenders have pressured appraisers into making the number - we need a true independent system for collateral valuations. While the recent announcements by OFHEO are a good starting point, my concern is that appraisal management companies work not with local and experienced appraisers but rather the lowest cost provider. A mortgage is based on the borrowers ability to repay the debt and the value of the underlying collateral - the use of Automated Valuation Models and the reliance on those appraisers who are willing to make the lenders required value appear legitimate has played a big part in this crisis and needs to be addressed. Mar 12 01:12 PM

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