Now that the housing market has finally turned we learn that many of the loans were written on questionable valuations of housing once people try to refinance those outrageous nuclear no money down interest only loans. And the LTV’s (loan to values) are now inverted almost across the board on these loan types. The article blames the appraisers, but where is the blame on the ethics and others in the marketing chain:
– The home builder selling extra houses during the boom making extra profits off increasingly lower quality houses.
– The mortgage bankers and banks making fees off of the loans and then reselling them. Will they take the coming credit loss themselves or will they try to pass it onto the American taxpayer and not back to their shareholders like they should. Remember when you used to put down 20% on a house purchase, there was a reason for it that we will soon be asking why it was abandoned.
– The publishers that made it all too easy to advertise without educating the consumers, many who had no idea what interest only or ARM meant.
– Where were the reporters that write now on these subjects as if it’s new news of what drove the boom for the past five years? That silence was deafening.