The Truth about Housing: Where did the Money go that used to be in Your House?
By: Dr. Phil Taverna
Mr. Wavering asked the most important question. Do we have any proof that the Democrats crashed the housing market by August 2008? Yes there is plenty of proof. But letâ€™s go back to 2008. By that time the Republicans were ahead in the polls. And if the housing market didnâ€™t crash there was a good chance the Democrats would lose it all.
By the way the author goes into a great deal of detail in his book about this subject. So this is the short cut version. We can take for granted that Mr. Wavering like others think that the bottom fell out of the housing market. The bubble burst and the rockets red glare. To say the market in now where it should beâ€¦ is real odd because if its not corrected it will definitely go lower.
It would be great if the average automobile sold for $5,000. Believe it or not before lease deals came along, you could get a pretty good car for less than $10,000 bucks. Gasoline was way under a dollar a gallon and it had lead in it. The Verrazano Bridge was less than a buck each way. Now it costs $17 dollars round trip. Enough of this nostalgia stuff.
Granted I will give Mr. Wavering credit in his concern: Is a house really worth $300,000 with a tax bill of $6 to $10,000 per year? But of course everything is relative and related.
The facts are very simple. There was a real estate deal in Wilkes-Barre Pa. The house appraised for $129,000 around July 2008. It appraised for the same amount about 6 months earlier. And the county just spent a fortune on assessing all the properties. So by July 2008 the county assessed the property at $130,000.
So any bona fide bank would accept these appraisals and loan money based on these figures. That would and should have happened but by the time August 2008 rolled around the banks took on a whole knew view and attitude.
They decided to call for a field appraisal. We were privileged to pay for that appraisal as well. The field review came in at â€¦ wait for this $97,000. Now the dates may have been adjusted a bit, but in essence the bank determined that the property would only be worth $97,000.
The comps were all there. The comps that created the appraisals for $130,000 were all there. The time between both appraisals was about 2 weeks. Whatâ€™s happened in 2 weeks that would cause a property to drop $33,000 in 2 weeks?
Whatâ€™s a comp you ask? They try to find houses that compare in value to the house thatâ€™s being appraised. The market didnâ€™t change in 2 weeks. But the banks deemed the value of the house to drop almost 23%. It wasnâ€™t the law of supply and demand it was someone screwing all Americans that owned a home and any kind of real estate.
Also keep in mind that all the prior appraisals were full appraisals. They took pictures. They went inside the house. They did what they were supposed to do.
The bankâ€™s bogus appraisal was a drive by. The appraiser never saw the inside of the house. So what that really means is the bank didnâ€™t ask for an appraisal! They just pre-determined that the house was worth $97,000 and all the appraiser had to do was to confirm this.
It would go like this: I want a drive by appraisal and I want to know if the house is worth $97,000. You can be the dumbest person on the planet and know that this does not smell right!
So you have to ask the question who persuaded the banks and forced them to lower all house values by about 23% by August 2008.
You would think by now every Republican in congress would be looking into this. And by the way if the bank does this to you there is not much you can do. Since it was an investment property we left more money in the property then we planned. But if we were able to get 23% more out of the property we would have used that to invest in more real estate. Do you have any idea how much that would help the economy? You can also figure out how much this one simple scam hurt your economy!
This happened all over the country and it has actually become worse. The appraisals are even lower because of all the foreclosures and short sales.
How did they get away with it? In towns like York PA there are many houses on the market and they are being sold daily. So instead of taking the top of the litter to determine the appraisal, they take the lower or bottom of the comps.
Letâ€™s think about this. In the old days when real estate was a great investment and it went up in value every year, the appraisers were always looking at the better comps. Letâ€™s give an example. Letâ€™s say you wanted to buy a house in York, PA. You offer to buy the house for $100,000 and you can afford to buy the house.
In the old days before August 2008, the appraiser would find comps that were similar to the subject house or better and say without a doubt the house will sell for $100,000. The bank loans you the $90,000 and you own a house that appreciates for the same reason year after year.
So what the banks did around August 2008 was to instruct appraisers not to use the best comps. So in most cases we are seeing them use low comps. So now you canâ€™t buy the house for $100,000 because the bank says the house is only worth $75,000 and thus they will only loan you $65,000 and you will need a down payment of $45,000 to buy the house! Because of this you donâ€™t buy the house.
It wouldnâ€™t take a rocket scientist to see that there is something rotten in the banking business. And the only party that benefited by this scam were Democrats in 2008.
So why arenâ€™t the folks investigating this. There is plenty of proof. You start investigating all these underwriters and we might find another Watergate. This would be far worse then breaking into a psychiatristâ€™s office to obtain a picture of a woman!
Besides the Democrats who won, at least until 2013, who else benefited by the scam? What about all those folks that went short on those derivatives that covered all these mortgages? Investigate those folks. They made billions.
You might want to look into all the homes the banks were able to foreclose on because of this. If there were any assets it was all gravy to the banks. And there is a long rap sheet on all the underhanded tricks the banks used on these unfortunate folks. Keep in mind in the old days the local bank held the mortgage. Today some remote company owns the property and they donâ€™t know who you are and they donâ€™t care about you!
My favorite story is a bank that wouldnâ€™t let the owner sell the property because the greedy bank wanted all the asset value. Before the owner handed over his hard earned investment he razed the building with a bulldozer. Let the greedy banks chew on that one.
The only reason we need to get the houses back where they were in value is because the entire economy is determined by that single fact.
The real estate taxes will need to go up because there are less houses occupied and paying taxes. If they reassess the values of the homes the tax base will drop at least 23%. If you just take a good look at the problem, the only conclusion you can draw is that the entire economy rests on the fact that your house is worth a certain amount of money. And cutting it by 23% or more is not going to bring about prosperity for anyone!
It has been stated many times that if they roll the appraisals back to pre-2008 amounts, it wonâ€™t cost the taxpayer a dime. Any stimulus or any other stupid Obama attempt to fix the economy will cost the taxpayer trillions of dollars. This fix will cost nothing!
So show me one home owner who bought a house who had no income and not a good credit report. Thatâ€™s what the Democrats want you to believe. I have dealt with banks for over 40 years. They always look at the credit report, and tax returns. Just show me one person that had a horrible credit report and no job and they were given a mortgage by a bank. That is a lie. The best way to find the missing money is look under all these rocks and find out why the Democrats stole all that asset money from your house. In some cases they stole the whole house. Where is that special prosecutor when we need one?
Dr. Phil Taverna owns and operates his own website.