I always thought the word crisis wasn’t the right word for the situation we find ourselves in these days. I see this more as a housing reset. It’s when the issue crosses over into the mortgage/credit arena, then we are in a crisis – sort of a technical malfunction. Massive de-leveraging = a crisis I suppose.
There’s a good article in Forbes called, oddly enough: “The Housing Crisis Isn’t A Crisis.”
>This brings us to Zywicki’s disagreement with the Obama administration. Treasury Secretary Timothy Geithner, Director of the National Economic Bureau Lawrence Summers and the other adepts in the administration all argue that the bursting of the housing bubble amounts to a national tragedy. According to President Obama himself, the “crisis” is “unraveling homeownership, the middle class and the American Dream itself.”
…and we start to realize how much power the financial services sector wields over Washington policy makers. This is best explained in Simon Johnson’s piece in The Atlantic called The Quiet Coup.
Of course many find it easier to simply blame the person in closest proximity in this fun piece in Salon by Erica Ferencik called They shoot real estate agents, don’t they? Erica bills herself as “a recovering stand-up comedian and featured guest on NPR’s “Morning Stories.” I recently plugged her recent novel, “Cracks in the Foundation” which is a good read. Erica promised me an Orange Julius or a mention of my eventual first book in her blog, whichever comes first.
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I read a post somewhere recently to the effect that the mortgagees who borrowed in over their heads share responsibility for this correction mess right along with them that made the loans available. Which to me is analogous to blaming a kid for reaching into an open cookie jar.
As far as shooting the real estate agents, that would be mostly fine with me, crisis or no crisis. But caveat, they will, hydra-like, grow back at the mere scent of money.
While we are at it, how much responsibility does an appraiser have for enabling the bloat in mortgage lending? I’ve heard it said, a lot, that a conscientious appraiser shares none, and every appraiser who says that is, of course, conscientious.
Well appraisers can’t know the future, even though we routinely hazard guesses at marketing time, and in the name of confidentiality, nobody lets appraisers know the borrower’s ability to re-pay. But even so, I maintain mortgage appraisers enabled this, and for that reason have responsibility to join the intervention. Cold turkey is the indicated remedy.
The appraisal profession must refuse, in-mass, to work on mortgage appraisals, especially those that we know will loose their identity in the secondary market.
Is that draconian?
I think the free market has already determined that good appraisers perform minimal work for lending institutions because of the onerous terms.
Have you told the free market that, or are corresponding banks and mortgage brokers not a legitimate part of the free market?
There are still SFR mortgage number hitters falling all over themselves to work fast for peanuts around here.
Oh, I got it. You qualified appraisers with good. By golly, I’ll bet that might cause some resentment among our swollen ranks of arrogant practitioners.
I still think the profession should require good as condition of getting or maintaining a license and let the secondary market go begging. That could be our contribution to the bailout.
I am glad to hear good appraisers are not appraising for the secondary market. Now if the nation only had some way to require a little more accountability in derivatives and ratings.
Obamasan said that’s in the package. Will we live long enough to see the effect?