In recent years there has been a criticism of the real manor assessment industry and some deservedly so, but the evaluation is a critical function of lending because it establishes the value of the collateral. For many decades this function was handled by human appraisers, but in recent years computer generated valuations have come into being. The following article talks us through the estate appraisals New York under fire again.
Banks: Follow the money, and it will always lead you to the culprit. In this case the banking industry. They overextended themselves through high-risk loan practices and then packaged the loans as products and sold them to other institutions - essentially spreading the infection. While overall loan rates remained low over the preceding three years with the dramatic rise in fuel costs in early 2008, credit became tighter, and these higher non-market based loan rates jumped as their entry level adjustable period ended.
The banks couldn't refinance everybody because they had no real money or solvency when compared with the debt of the loans. No money = no credit. No credit meant everything that used revolving credit to finance itself such as credit cards, small business, large retail businesses and home owners/buyers found they high and dry.
The government decided that the best way to deal with this was to flood the banks that created the problem with money. Illogically they assumed that institutions that had not acted in their shareholders best interest would now suddenly change, even former Chairman Greenspan was amazed at the bank's duplicity. The Bank's did exactly as you would expect anyone in a tough financial place that got bailed out - they covered themselves.
Real estate appraisers are traditionally independent contractors/business people - no appraisals = no money. So while you are paying a relatively standard one-time fee (e. G. 400 dollars), they have to make sure they get as many appraisals in as they can to make any profit at all. How's that? After all, they've got your 400 dollars.
Consider an appraisal that estimates a value below the sale price of a home to be like a traffic ticket and the appraiser to be a policeman. Under ideal circumstances, a traffic cop does not write a single speeding ticket because people are driving within the speed limit. Human nature being what it is, it's a sure bet that if everyone knew that the local authorities had decided to remove the cops from the roads, a large percentage of drivers would speed up, accidents, injuries and fatalities would increase, and that sooner or later the police would be back.
The very presence of a visible policeman on the road does a great deal to hold down violations and accidents. If the police are writing too many tickets, we know something is wrong and that the system is not working, but when tickets are at a minimum, we know that the system is probably working. The same is true with real estate appraisers.
Appraisers: Real estate evaluators are conventionally approved by the state they operate in and judge within a given topography, so they advance over time a brilliant "feel" for market value. They are usually autonomous commercial folks who do assessments on a fee basis - no appraisals equal any money. Appraisal fees for regular homes can run from 200 to 400 dollars depending on the area and amount of work.
Banks: Follow the money, and it will always lead you to the culprit. In this case the banking industry. They overextended themselves through high-risk loan practices and then packaged the loans as products and sold them to other institutions - essentially spreading the infection. While overall loan rates remained low over the preceding three years with the dramatic rise in fuel costs in early 2008, credit became tighter, and these higher non-market based loan rates jumped as their entry level adjustable period ended.
The banks couldn't refinance everybody because they had no real money or solvency when compared with the debt of the loans. No money = no credit. No credit meant everything that used revolving credit to finance itself such as credit cards, small business, large retail businesses and home owners/buyers found they high and dry.
The government decided that the best way to deal with this was to flood the banks that created the problem with money. Illogically they assumed that institutions that had not acted in their shareholders best interest would now suddenly change, even former Chairman Greenspan was amazed at the bank's duplicity. The Bank's did exactly as you would expect anyone in a tough financial place that got bailed out - they covered themselves.
Real estate appraisers are traditionally independent contractors/business people - no appraisals = no money. So while you are paying a relatively standard one-time fee (e. G. 400 dollars), they have to make sure they get as many appraisals in as they can to make any profit at all. How's that? After all, they've got your 400 dollars.
Consider an appraisal that estimates a value below the sale price of a home to be like a traffic ticket and the appraiser to be a policeman. Under ideal circumstances, a traffic cop does not write a single speeding ticket because people are driving within the speed limit. Human nature being what it is, it's a sure bet that if everyone knew that the local authorities had decided to remove the cops from the roads, a large percentage of drivers would speed up, accidents, injuries and fatalities would increase, and that sooner or later the police would be back.
The very presence of a visible policeman on the road does a great deal to hold down violations and accidents. If the police are writing too many tickets, we know something is wrong and that the system is not working, but when tickets are at a minimum, we know that the system is probably working. The same is true with real estate appraisers.
Appraisers: Real estate evaluators are conventionally approved by the state they operate in and judge within a given topography, so they advance over time a brilliant "feel" for market value. They are usually autonomous commercial folks who do assessments on a fee basis - no appraisals equal any money. Appraisal fees for regular homes can run from 200 to 400 dollars depending on the area and amount of work.
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