I googled the victims name and found out more info. It appears that the victim was in fact honest…or at least that what we read. In this case, I do side 100% with the victim. The accused is a total loony toon! He only lost $4K in equity and he took another man’s life? What a sicko!!! Whoops…I can’t judge yet because I don’t know the full story, but from what I can see, the accused is a sicko.

You can read about it here:

http://www.woodtv.com/Global/story.asp?S=8584074
http://www.examiner.com/a-1469834~Slain_Mich__real_estate_agent_fondly_remembered.html

The rub is, we’ll never really know. The article only said the guy was unhappy because his value had declined. That’s a little scary if that was the only issue he had.

I can’t imagine there was an agent that was active during the boom that doesn’t have a single property out there that wouldn’t sell for less now. If that becomes a shooting offense, they are all in trouble.

That said, it is quite likely that the guy thought his agent was like “Suzanne”- she researched it- he was safe.

That’s what I am saying is that Real Estate agents should be held responsible for outright lying. Without knowing all the details, I don’t think we can say that the agent had NO fault at all.

As a matter of fact, it is just a guess, but I am willing to bet that some sort of misrepresentation by the agent was probably done. Just a hunch.

Regarding the appraisers, I agree that much of this mess was valuing homes which were worth less. Perhaps jail time is in order. Well, the feds are investigating this matter. Hopefully, we get more arrests.

I agree with you %100. Most of the people who bought in the last 5 years could not afford the house to begin with. I am all for helping someone out do to a serious health problem (i.e cancer) or something that is totally unforseen. However, greed was the major factor in this whole mess. Greed severely clouds peoples judgement and usually the consequences are severe. However, if the fed (aka taxpayers) bail the major players. The major players will just keep doing the same thing.

Sadly, between the Fed’s keeping interest rates too low and the Treasury orchestarting the bailout of Fredddie and Fannie (it’s coming, believe me) the average American is seeing his purchasing power, his wealth and his security erode.

And you can’t be serious about greed not being part of this equation. It was one of, if not THE, biggest cause of the unsustainable run up we experienced.

Fittingly, Igor says: collude

The man had no excuse to kill his agent. I am concerned that there is a vindictive element in many people now who see no reason for compassion or tolerance for mistakes or inexperience. It is a ‘throw em under the bus’ generation sadly.

So where is your venom for the Fed bailing out Bear-Stearns or standing ‘ready’ to bail out banks/lenders who scammed both investors and home buyers?
Oh, thats just business, right?

You CAN swindle an honest (but inexperienced) man if he fails to know facts or the risks deliberately hidden from him. Many people walk into Casinos to gamble. They deal with experts and stacked against them odds. MOST walk out the loser regardless of how smart they are.

What facts or risks were “deliberately” hidden from him? That prices might fall? That he would lose his house if he didn’t pay his morrtgage? I find it hard to believe anyone could manage to cross the street for 73 years without getting run over and not know those two things. And since he HAD to know that, why didn’t he ask “what happens if prices fall?” “What happens if I can’t refinance?”

The answer: greed.

As for the people that bought the securities, well, if you have a 401k or a pension plan that someone is probably you.

Most telling, though, is your comparison of housing to a casino. It is that type of thinking – that housing can give me “something for nothing”, like a roulette wheel or a hand of blackjack, that caused this whole mess to begin with. Thinking housing will make you rich rather than give you a place to live makes about as much sense as getting a room at the Bellagio and expecting to stay there for the rest of your life because you paid for one night.

You CAN swindle an honest (but inexperience) man if he fails to know facts or the risks deliberately hidden from him. Many people walk into Casinos to gamble. They deal with experts and stacked against them odds. MOST walk out the loser regardless of how smart they are.

Think of it a little like the Katrina levee debacle. Everyone ‘knew’ they wouldn’t ‘hold major water’ uh, stand the ultimate test but everyone ‘above’ and ‘below’ hoped they would hold. Well it didn’t, they didn’t and everyone lost, didn’t they?

Well the financial market ‘pidgeon drop’ ‘er uh’ pyramid scheme failed too.

You can’t be serious. I mean, what salesperson DOESN’T lie?

“Oh, that dress looks great on you!”

“That shirt makes your eyes look so much more blue!”

“Oooh, the ladies will really go wild for you in that convertible!”

“No, nobody will be able to tell you’re wearing a toupee, I guarantee it!”

C’mon – anyone not smart enough to know this a)should probably have never qualified for a library card let alone a mortgage, b) deserves to get “suckered” (a fool and his money are soon parted) and c) has absoluetly nobody to blame but himself.

My guess is that this guy was talked into doing a 100% cash out re-fi into some sort of ARM and was told that when the loan reset he could just re-finance again and when he couldn’t, and couldn’t sell the house for enough to cover the mortgage, flipped out.

But so what? Did he think there were no strings attached when someone handed him a check for 135K and asked him to sign on the dotted line? He knew EXACTLY what he was doing and was so mad at himself for giving in to his own greed that he looked for, and found, a scapegoat.

They should draw and quarter him and hang his four body parts in front of the NAR, Freddie Mac, Fannie Mae and the Fed as a reminder of what these organizations are capable of.

My $.02

Igor says: sad

Most people just fail to understand how things work. It was refinancing up that broke the bank, not sales. Appraisers use actual sales for comps but when inventory is low and prices rise, the market is there, particularly when builders were selling to any live body that walked in the model home, with no money down. The value rose because everyone could qualify to buy. When value rose home owners to refinance on the wave, spend the money and go again in a year or two.

Pure speculation broke the system and it isn’t going to come back because inventory is there and people can no longer qualify to buy!
There are many good points made here and of course some scammed the system, some flipped houses on the wave much like stocks are shorted and sold on the wave but what I saw up close and personal were people duped or bait and switched at the last minute or closing table for a bad loan with no one to represent them except to walk away from the deal. Most people, including smart people won’t walk away from something they have their heart set on, believing all those people at the closing wouldn’t actually scam them. But that is what happened! I saw a loan broker scam his own brother for a dollar at the table and the brother saying “I want a fixed loan” with the broker brother telling him he could refinance in a couple of years when the loan reset. NOT! People who had no idea what the playing field meant and trusted their mortgage broker, real estate agent and banker to protect them. Appraisers who failed to report what they were seeing had no choice but to ride the wave because value is not based on houses, it is based on market demand! Demand was high, inventory was low and everyone could qualify! Who was to put on the brakes? The lenders had the call, the government should regulate the lenders/bankers but no one wants to hear that. The fact is the Fed is meeting right now with the Senate to discuss that very need.

Close the gate after the cow is out with no hope of recovery! That is the rule of the day in our system. Let the market regulate itself without holds. Well we see what happened.

After I got done laughing, I would say to that person “Who guarantees you?”

And then, when you went back, he told you, yeah, the market has changed, I was wrong, what can I say – you’re out $20,000. Now, if you please, I’ve got another car to sell today.

You can say the buyer was a sucker, but he was also suckered by someone who was lying to him to make a buck – i.e., fraud, or something morally equivalent.

Now, none of us knows the details of the case on which this thread started, but I assure you, just based on my own experiences, there are lots of cases where Realtors made representations of fact, and pitched opinions about the future as facts beyond dispute, which were abjectly false. If you paid money after someone lied to you, you were a victim, perhaps of your own stupidity, but also of a liar and a thief. Sometimes, thieves get shot, and the rest of us seldom cry for them – we usually breathe a sigh of relief that one more scumbag is off the street.

Igor’s fitting tribute: overdue

UUUTHE,

Information presented to us does not make your statement (see above) a valid one. If Mr. Johnson was angry due to major defects in the huse (structural)that was known prior to closing and not disclosed, then your statement is valid. If Mr. Johnson was angry due to slumping values (depreciation) then your statement is not valid.

If I bought a car (and over paid) for $30,000 (because the owner said that it is worth that much) and then had to sell it and could only get $10,000 for it. Should I shoot the previous owner?

At 73 this Johnson guy has NO excuse for not knowing exactly what he was signing, what the risks were, what his ability to pay was, and what the risks were if things did not go his way.

It is long past time that we as a country quit makig excuses for guys like this. Why is he buying a home at age 73? Did he move? If so, why does he need a mortgage? Is he a first time buyer? Did he trade up because he wanted something “bigger and better”?

To me there are more questions than answers in this article but the bottom line is that the guy got what he signed for and if it is now worth less, well, too freaking bad. I hope they strap him into a copper bathtub, fill it with water and throw a toaster in.

Again: you can’t swindle an honest man.

And, very fittingly, Igor says: GUILTY

Guns don’t kill people; I kill people

I suspect the reason that my landlord was unable to sell after 18 months on the market is that the house was overpriced by around 40%. [My best on the value of this place.] He’d like to sell the place to me, but until this guy is touched by the Reality Fairy, I’m not interested.

In theory an independent appraisal would shake him out of his dream world and keep potential buyers from paying that much. You are right though, it’s not going to happen.

If banks are smart they’ll have a thorough in-house appraiser. If buyers are smart, they will do their homework. Appraisal or no, there is no substitute for doing the research yourself.

If the theory was to protect lenders and borrowers, I’d have to say the appraisal industry is the poster child for useless fee-collecting industries. Unless there were some (heroic) appraisers who actually had a conscience and didn’t sign off on values, I’d say the number of lenders and borrowers who were actually protected could be counted on the horns on my head.

L was telling me about the whole appraisal issue.

Apparently there was no appraisal required prior to the S&L bust, the theory was that an independent appraiser would protect lenders and borrowers.

The trouble is, it’s hard not to “Dance with the fella what brung ya.” How independent is an appraiser who is a favorite of a lender or an agent? Appraisers, like everyone else, need to work for the guy that pays the bill.

Obviously the system is broken. For appraisals to be “independent”, you would need to call a central pool and never be certain who your appraiser was. When appraisers never work for the same person twice, the pressure to “hit a certain figure” is gone.

The other option is to quit pretending and make appraisals optional. Maybe then everyone does a better job of doing their own homework.

“…lenders blackballed appraisers who did not deliver…” This is exactly how the bubble was allowed to flourish; this sale is slightly above the last comp which was slightly above the prior comp which was slightly above the prior comp. I guess the lenders needed some third party to point the finger at in case of disaster, but I haven’t heard of any cases where the lenders have tried to take appraisers to court for fraud.

It’s nothing personal, but I’m just wondering, out loud, if the buyers were willing to pay a price and the lenders were willing to lend at that price, what is/was the point of the whole appraisal process?

The cast of characters that “gamed the system” was rampant. The problem lay with crooks- it doesn’t matter really if they were buyers, sellers, brokers, appraisers… whatever.

There were heroes out there too. The agents who said “save your money” the appraisers who refused to cave, the brokers who refused to provide a loan for some ding-dong they knew would go down the street. Kudos to all of them.

Sadly we have had a system the has rewarded unethical behavior and punished honesty and decency.

As long as that’s the case, we are going to have problems.

Appraisers have a lot of latitude but most appraisals are reviewed by underwriting departments whose job it is to look at the deal to see if it is valid. Most underwriters have subscription access to the same database/comparable sales that appraisers have. They can see and are experienced enough to see if an appraiser is ‘making’ the value or just reporting it. Most people fail to understand the role of an appraiser and how they determine value. Value for a financial transaction is always in the comparison of value of recent sales in a subject neighborhood, market value.

Contrary to what most believe the problem that is causing the housing crisis is not in sales of houses but from refinancing. Sales are pretty much what the market will bear and people who shop for houses know their target market. The real real-estate fall out came with people refinancing loans, pushing the value based on rising prices, a glut of new construction with builders giving back huge rebates, pushing the values so they could rebate 10,000-15,000. (Like oil futures?)Prices rose quickly, people refinanced within a year or two of purchase because they had speculative ‘equity’ in their homes. Many spent their refinance ‘cash-outs’ to live on or pay the notes on their new loans. When the cash ran out, if they could refinance again, many did. So you have massive inventories of houses that are maxed out with prices falling.

Now appraisers are faced with trying to ‘find’ the true market in a declining market. Lenders still don’t want to hear a neighborhood is ‘declining’ or the the market time exceeds 6 months so we have major problems that are in our industry.

YES, I said just beginning. Those who purchased houses or refinanced on no-doc/liar loans can no longer buy. Losing their homes in record numbers with no one to purchse them. Lenders are cutting these foreclosured bank owned houses to 50-60% value, further damaging a declining market, in order to dump them for a quick sale. Now the appraiser must filter through these dumped houses and find a normal arms-length sale, often with 75% of sales in distressed category in some neighborhoods.

It isn’t an easy task and yes appraisers who can’t adapt are just no longer appraisers. In the past lenders blackballed appraisers who did not ‘deliver’ and little has changed at this point. As long as you have loan officers and agents working on commission, the problem exists.
Appraisers are turning in their licenses everywhere with fees declining, increasingly hard to collect. Many loans do not make and no one wants to pay an appraiser until a loan closes. Pressure has actually increased. Expenses are tremendous to a license, subscriptions, databases, equipment, travel expense (gasoline), privilege tax, MLS, not to mention office expense and continuing education costs. I have turned to selling real estate and review work to supplement. Sales are declining with loans difficult to get for my buyers. It is a difficult situation that is only getting worse, not better.