Lenders Don't Want to Know the Values of Homes.

Another day, another notch in the belt of the subprime meltdown. I can't help but get depressed noticing how much of a long term, serious problem this whole thing has become. I was recently talking to another appraiser friend of mine and we both agreed, this sucks.

Here in NW Ohio, property values are declining in most sub-markets and what's worse, the 8-12 month supply of available housing just means prices will continue to fall well into next year. I like to think I'm eternally optimistic but this is hard to swallow.




Having a front row seat to this mess I can honestly say that lenders don't want to know what homes are worth, they want the appraiser to hit a number to "make the deal work." What's worse is it's not just a small few unscrupulous mortgage brokers pushing this crap, it's the ENTIRE industry. Lenders/Banks in all shapes and sizes work the same way; if you don't comply and get the number they need to close a loan, they'll simply put your name on the "do not use" list and find someone who will. No joke. I would have to say <5% of all appraisal requests don't have a pre-determined value on them. Of course this is illegal, but no one seems to care.

As far as legislation to fix this, good luck. It's been this way forever. Seriously. Talk to any dinosaur appraiser and they will admit it. Mortgage lending appraisals are, for the most part, worthless.

So what does all this mean? If you own your home, plan on staying there for several years. If you don't own a home and can afford to buy and stay in the same place for the next decade, the next year will be one of the best times in history to buy LOOOOW.