Hi Skylyn, Can you break down what you mean by this: "If "legitimate" practices means ne wants Brokers to *NOT* be empowered to shop a complete collateral file among competitive wholesalers to gain a commitment (the ONLY option remaining, in his proposal where Brokers don't have appraisals issued in their firm's name & control,) then does that mean he is reversing his position about fiduciary treatment?" I looked over at broker outpost, and sure they're upset, but I'm not seeing this arguement. Thanks! I haven't been at Broker's Outpost in a while... and while it is of far greater quality as a professional community than the Mortgage Grapevine (which is a sewer,) I don't find very much high-end threads there. It is mostly originators of the "product pusher"mentality rather than a client-centric financial planning mentality. Here's the basic problem. Brokers are hired to get better rates, pricing, and terms for consumers than the consumers can get for themselves. To do this, Brokers will often act as the hardball negotiator amongst a pool of wholesale lenders who are competing for the deal flows from these brokers. Legally, an appraisal is "owned" by the ordering party (not the billpaying party.) Brokers are contracted by wholesale lenders and held responsible for the validity (and the work process) of the appraisals they order, and since the broker is the one ordering them, the appraiser issues the appraisal in the name of the brokerage firm itself (which, as an approved affiliate of several lenders, is accepted as valid by those lenders.) NOW, the lenders may STILL run various verifications of that appraisal, including electronic AVMs, and/or even additional field appraisals, where the lender itself orders (and pays for) an additional appraisal to be physically performed. BROKERS provide the general public with a "advocacy layer" that holds the retail divisions of the banks honest to the lowest competitive rates & terms. If the general public could ONLY use retail lenders, it would (and is) very easy for the retail operations to squeeze up their pricing simply because the general public is clueless about the effective way to stop them from doing so (and shopping by quotes, Bankrate or Lending Tree ain't it!) If the laws PROHIBIT brokers from directly ordering and controlling an appraisal, the Broker can no longer shop for the best competitive ofers for a specific loan file, since no lender will make a binding offer prior to fully reviewing the appraisal for collateral. In essence, Cuomo's proposal eliminates the competitive pressures that keep the retail side of the industry honest. Since brokers "earn their keep" by doing this, they are clearly P.O.'d. Hope that clarifies. Cheers, Dave Donhoff Strategic Equity & Leverage Planner

I don't agree: "This suggests that one of main differences between OFHEO and Case-Shiller was that Case-Shiller included many non-agency homes financed with subprime loans. These homes saw more appreciation during the boom, and are now seeing larger price declines. Whatever the reasons, the Case-Shiller index seems to more accurately reflect the current price declines in the housing market, as opposed to the OFHEO index. And this has significant implications for the economy." See here: http://calculatedrisk.blogspot.com/2008/01/house-prices-comparing-ofheo-vs-case.html OFHEO's own economists agrees: http://www.ofheo.gov/media/research/OFHEOSPCS12008.pdf

IMO, these people have learned from Wall Street, as they too walked away from their TRILLIONS in debt. Their outrageous leveraging decimated the economy...yet THEY were bailed out by the taxpayers...courtesy of the same politicians who won't extend unemployment benefits. The finance community is now rolling merrily along, laughing all the way to the proverbial bank, and planning on hiring. That being the case, is there any wonder that so many home buyers have just said "screw it"? Here is a recent, very on point NYT article. Interestingly enough, when the rich walk away...or a corporation walks away, it is considered an "investment strategy" in terms of cutting losses. When the average person does the same, they are considered to be greedy deadbeats, who bit off more than they can chew, and are getting what they deserve. We live in a society that penalizes anyone who has a moral compass, and rewards those who have destroyed our economic viability simply to feed their own unbridled greed. Gives a whole new meaning to "double standard" and reinforces the old adage, "nice guys finish last". July 8, 2010 NY Times Biggest Defaulters on Mortgages Are the Rich By DAVID STREITFELD LOS ALTOS, Calif. No need for tears, but the well-off are losing their master suites and saying goodbye to their wine cellars. The housing bust that began among the working class in remote subdivisions and quickly progressed to the suburban middle class is striking the upper class in privileged enclaves like this one in Silicon Valley. Whether it is their residence, a second home or a house bought as an investment, the rich have stopped paying the mortgage at a rate that greatly exceeds the rest of the population. More than one in seven homeowners with loans in excess of a million dollars are seriously delinquent, according to data compiled for The New York Times by the real estate analytics firm CoreLogic. By contrast, homeowners with less lavish housing are much more likely to keep writing checks to their lender. About one in 12 mortgages below the million-dollar mark is delinquent. Though it is hard to prove, the CoreLogic data suggest that many of the well-to-do are purposely dumping their financially draining properties, just as they would any sour investment. "The rich are different: they are more ruthless," said Sam Khater, CoreLogicÂs senior economist. Five properties here in Los Altos were scheduled for foreclosure auctions in a recent issue of The Los Altos Town Crier, the weekly newspaper where local legal notices are posted. Four have unpaid mortgage debt of more than $1 million, with the highest amount $2.8 million. Not so long ago, said Chris Redden, the paperÂs advertising services director, "it was a surprise if we had one foreclosure a month." The sheriff in Cook County, Ill., is increasingly in demand to evict foreclosed owners in the upscale suburbs to the north and west of Chicago  like Wilmette, La Grange and Glencoe. The occupants are always gone by the time a deputy gets there, a spokesman said, but just barely. In Las Vegas, Ken Lowman, a longtime agent for luxury properties, said four of the 11 sales he brokered in June were distressed properties. "IÂve never seen the wealthy hit like this before," Mr. Lowman said. "They made their plans based on the best of all possible scenarios  that their incomes would continue to grow, that real estate would never drop. Not many had a plan B." The defaulting owners, he said, often remain as long as they can. "TheyÂre in denial," he said. Here in Los Altos, where the median home price of $1.5 million makes it one of the most exclusive towns in the country, several houses scheduled for auction were still occupied this week. The people who answered the door were reluctant to explain their circumstances in any detail. At one house, where the lender was owed $1.3 million, there was a couch out front wrapped in plastic. A woman said she and her husband had lost their jobs and were moving in with relatives. At another house, the family said they were renters. A third family, whose mortgage is $1.6 million, said they would be moving this weekend. At a vacant house with a pool, where the lender was seeking $1.27 million, a raft and a water gun lay abandoned on the entryway floor. Lenders are fearful that many of the 11 million or so homeowners who owe more than their house is worth will walk away from them, especially if the real estate market begins to weaken again. The so-called strategic defaults have become a matter of intense debate in recent months. Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them. In a recent column on Freddie MacÂs Web site, the companyÂs executive vice president, Don Bisenius, acknowledged that walking away "might well be a good decision for certain borrowers" but argues that those who do it are trashing their communities. The CoreLogic data suggest that the rich do not seem to have concerns about the civic good uppermost in their mind, especially when it comes to investment and second homes. Nor do they appear to be particularly worried about being sued by their lender or frozen out of future loans by Fannie Mae, possible consequences of default. The delinquency rate on investment homes where the original mortgage was more than $1 million is now 23 percent. For cheaper investment homes, it is about 10 percent. With second homes, the delinquency rate for both types of owners was rising in concert until the stock market crashed in September 2008. That sent the percentage of troubled million-dollar loans spiraling up much faster than the smaller loans. "Those with high net worth have other resources to lean on if they get in trouble," said Mr. Khater, the analyst. "If theyÂre going delinquent faster than anyone else, that tells me they are doing so willingly." Willingly, but not necessarily publicly. The rapper Chamillionaire is a plain-talking exception. He recently walked away from a $2 million house he bought in Houston in 2006. "I just decided to let it go, give it back to the bank," he told the celebrity gossip TV show "TMZ." "I just didnÂt feel like it was a good investment." The rich and successful often come naturally to this sort of attitude, said Brent T. White, a law professor at the University of Arizona who has studied strategic defaults. "They may be less susceptible to the shame and fear-mongering used by the government and the mortgage banking industry to keep underwater homeowners from acting in their financial best interest," Mr. White said. The CoreLogic data measures serious delinquencies, which means the borrower has missed at least three payments in a row. At that point, lenders traditionally file a notice of default and the house enters the official foreclosure process. In the current environment, however, notices of default are down for all types of loans as lenders work with owners in various modification programs. Even so, owners in some of the more expensive neighborhoods in and around San Francisco are beginning to head for the exit, according to data compiled by MDA DataQuick. In Los Altos, Los Altos Hills and the most expensive neighborhood in adjoining Mountain View, defaults in the first five months of this year edged up to 16, from 15 in the same period in 2009 and four in 2008. The East Bay suburb of Orinda had eight notices of default for million-dollar properties, up from five in the same period last year. On Nob Hill in San Francisco, there were four, up from one. The Marina neighborhood had four, up from two. The vast majority of owners in these upscale communities are still paying the mortgage, of course. But they appear to be cutting back in other ways. The once-thriving Los Altos downtown is pocked with more than a dozen empty storefronts in a six-block stretch. But this is still Silicon Valley, where failure can always be considered a prelude to success. In the middle of a workday, one troubled homeowner here leaned over his laptop at the kitchen table, trying to maneuver his way out from under his debt and figure out the next big thing. His five-bedroom house, drained of hundreds of thousands of dollars of equity over the last 13 years, is scheduled for auction July 20. Nine months ago, after his latest business (he has had several) failed in what he called "the global meltdown," the man, a technology entrepreneur, said he quit making his $9,000 monthly payments. "IÂm going to be downsizing," he said. The man spoke on the condition of anonymity because, he said, he did not want his current problems to interfere with his coming reinvention. "IÂm a businessman," he explained. "I have to be upbeat." Carol Pogash contributed reporting.

Hi Frog-Hopper, Capitalizing every letter in every other word doesn't make it so. Really??? That's the BEST response you could come up with in light of the statement's content itself? Wow... I'm floored. ================================== Hi Lukkiirish, If possible, I would love to hear what your thoughts are about globalization, if a fix should be put in place for those states and if so what kind. The midwest is experiencing the pain of natural economic cycles and flows. It is in reality a much greater scale than the abandoned gold rush ghost towns of the 1800's... but the principals (and inevitable results) are the same. The midwest grew, at one time, to be dominant in manufacturing due to technology. Namely; shipping routes through the great lakes that allowed industry to stretch out west to less populated (and thus cheaper real estate) regions. In essence the Eastern seaboard had ITS nice paying jobs "pilfered" by continental "globalization" of cheaper overhead and labor in the midwest. Technologies have now developed to the point where the midwest (unfortunately) is experiencing a bit of "come-uppance" on it's treatment of the east coast 200 years back. The natural demands of the economy is best fulfilled elsewhere at cheaper costs and higher qualities. Imagine if you could go back in time to JUST as the gold rush was beginning to ebb, and (knowing what you know today in 2008) you could give advice to the folks in that town. Would you advise them to raise taxes and spend money to attract new kinds of mining businesses (because they were obviously the mining industry leaders already for ages)? Would you advise them to try to dig out big lakes to grow fish for new industries? Would you advise them to cut channels and raise aquaducts to bring in irrigation water for new farming lands that they had never had in those areas? OR... would you in your future wisdom, advise them that "the gig is up... time to move your families to where industry and the economy are actually going towards"? I think the most supportive thing we can do for folks is help them grow and learn to succeed. For MANY in the midwest (who are not yet at retirement age,) that means pulling up roots and making big changes. EVERYONE has the right to make their own choices, including the choice of remaining back in the "ghost towns" from the gold rush (or steel rush, or automobile rush, etc. etc.) But its counterproductive to ALL of society to try to burn our limited resources reversing the natural ebb & flow of the world economics. Cheers, Dave Donhoff Leverage Planner