Who's the Biggest Liar?
There is plenty of blame to go around for the cause and effects of the housing bubble and subsequent crash currently in progress. The list is long and getting longer as it becomes apparent that there is systemic corruption within the ranks of this Pyramid scheme that has been perpetrated on the Unites States public on a scale that will make history.
The Liar's List
Realtors, Mortgage brokers, housing construction industry, NAR, CAR, Bank/Lending organizations, Loose Lending practices, Appraisers, Flippers, Specuvestors, Idiots & Lemmings who believe whatever a person collecting a commission tells them, Main stream cheerleading real estate industry PR service type media, Baby Boomers, Alan Greenspan...
A recent comment exchange has me asking... we know who to blame and more may still be added to the list, but how much blame? Who is the biggest liar? Where did the lies really start? Who perpetrated the biggest lies? Who do we hold most accountable?
(comment exchange below)
Anonymous said...
I believe that it is more the appraisers fault than anyone elses. It is their responsibility to say what the house is worth. I think now is the time to stop all of this scamming, black, white, blue, purple......money is hard to come by now days. The government screws the people enough without some cut rate appraiser trying to screw somebody out of something.
2/17/07 11:37 AM
I believe that it is more the appraisers fault than anyone elses. It is their responsibility to say what the house is worth. I think now is the time to stop all of this scamming, black, white, blue, purple......money is hard to come by now days. The government screws the people enough without some cut rate appraiser trying to screw somebody out of something.
2/17/07 11:37 AM
Athena said...
I'm not sure I agree with putting the most blame on the appraisers. This is the person that depends on the recommendation from lenders and realtwhores to get business. This is the one that makes the LEAST amount of money and who's profession has been turned into a rigged rubber stamp game.
If appraisers were required to be picked at random and could not be blacklisted out of a job for telling the truth, and therefore being the turd in the punchbowl of easy lending kool-aid, that would be a different story. But in this pyramid scheme con game of real estate only goes up, nobody pays off their mortgage anymore scam... appraisers have been unwitting patsys.
I am sure that many of them saw what was happening, but really... should they all have to abandon their careers because the scammers who stand to pocket the most money have hijacked their career?
nopey nope nope. Not going to buy that the appraisers have the most blame here. They DO have some blame and bear some responsibility. There should have been a whole industry of them calling El Torro DOO DOO on this pyramid bubble scam. It would bode better for them if they had, being they will be dragged into the cesspool of misery with the rest of the pyramid builders.
2/17/07 11:48 AM
posted by Athena @ 11:51 AM
6 Comments:
There is a lot of discussion among appraisers about how to remove the pressure put on appraisers tocome up with the "right" number,and a great deal of resentment on the part of honest appraisers toward those who have sold out the profession.ditto for loan brokers and real estate brokers.there has been no enforcment of the rules,regulations and laws that govern the conduct of the industry for several years,however that is changing and there will be little mercy shown.nor should there be
It is easy to blame or absolve lenders, appraisers, realtors/agents, etc. All are to blame for their part and all can appeal to the tired "well, it was our job and no law says we couldn't do what you say we should not have done" sort of game.
Yes, the RE system needs to be cleaned up, regulated and/or laws imposed to be sure. Further, the RE game is rigged in favor of rising prices and when a speculative mania arrives that only feeds the fire. The balance of power between buyer and seller needs to be not only restored but hard-wired into the system. Buyer's agents need to be incentivised to seek the lowest price, etc...
But ultimately, IMO, we have to blame the people who agreed to pay way more than makes sense/ludicrous amounts for a property; in a word, buyers. These people did not do their homework; did not think and will and should pay the cost. Foreclosures are on the rise and have gone exponential. The piper has called and the lemmings follow.
It's called personal responsibility. But Americans these days find it more convenient to blame others and refer to themselves as victims than admit they were fools.
I agree Marinite. The whole Real Estate Industrial complex is designed to lie in wait for bubbles and then dash into action like cockroaches. When the fecal matter hits the ventilator and their next door neighbor realtwhore does the perp walk with the local mortgage broker who braggred about how many little old ladies have negam loans... I bet they start scattering like cockroaches and hiding their framed 1800realtwhore license. :-/
However, I think it will be really difficult for society to blame the buyers. I do think the blame starts there. Everyone knows the realtwhores, mortgage brokers etc are making money off them. They are the ones who are in control of whether or not there is easy sleazy money to be made. But the inmates were running the asylum and here we are. Too many people are going to know an FB and they are going to want to make an exception for them, that there won't be too much actual blame put on the lemming joe6packs who got stuck on stupid and listened to the least credible people when yoking themselves to a couple lifetimes worth of debt.
Fingers will get pointed at the faceless parts of the "industry." Rules that aren't enforced, or never in place. My fear is since everyone's mother, aunt, uncle, and the horse they rode in on, are realtwhores, mortgage brokers, appraisers, etc... are they going to manage to resist any real changes that need to be made?
I completely agree with Marinite. No one held a gun to anyone's head and made them buy a house during this mania.
I bought in '96 and sold in '04. Was my house or the town I lived in magically twice as nice as when I bought? Of course not.
But I do think banks need to be held to the fire. If they had held to "standard" lending practices of 10% or 20% down, 3x gross income, cash reserves, no credit card debt, a lot of these loans would never have been written in the first place.
Athena,huge numbers of licensees will simply let their licenses lapse,and we will get back to the usual ratios of competent/incompetent,honest/dishonest in the reic.don't forget the role of those who promoted RMBS as safe investments,also all of those who purchased billions of $ of this crap for PENSION FUNDS when they had a fiduciary duty to perform due diligence,thus enabling the lenders to keep the game going.Marinite must be tired ,and associating with the lower orders to use"incentivise".dual agency needs to be banned,and a separate class of buyers agency established,which has happened to some degree already.as far as going easy on the sleazes,most of the big boys will walk,as usual,but there will be a lot of political hay to be made,and there are a lot of ambitious DA's out there...can you say "election year"? it is much,much,better to be charged with some crimes in a non election year.
"But I do think banks need to be held to the fire."
I suspect many holders of subprime paper are going to feel something soon (if not already). Here's a list of the top 10.
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