FDIC Sues LPS and CoreLogic Over Appraisal Fraud; Shows Investors Leaving Money on the Table | The Subprime Shakeout

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It is Shocking that after years of collusion between banks and appraisers, there has been little discussion as to what role the appraisers played in creating the doom for real estate. I have found it hard to believe that appraisers have gotten off so easily for years when it was always clear that they were in the business of facilitating sales and loans rather than to give good appraisals. The appraisers have always been in the banks pocket whether it is for inflating or deflating appraisals. Anyone who has knowledge of real estate and has been involved in more than a couple of transactions knows that 99.9% of the time an appraisal relying on the sales comparison approach comes in at the sales price.

How can that happen? Well it can only happen if their is an agenda being followed. Namely, that the appraisers do what the banks tell them to do because they get hired by the banks. However, the way the banks cover up the conflict of interest is by having the buyer pay for the appraisal even though it is required by the bank, and usually done by an appraiser or appraisal firm that is tight with the bank and mortgage underwriters. Appraisers commit fraud on a daily basis. If a banks suggested a price is too high on a purchase agreement then the appraisal will get re written at a lower price. This type of fraudulent appraisal costs the borrower far more that an inflated appraisal costs the bank because the borrower doesn't get TARP money when the economy collapses.

READ MORE on appraisal fraud at this link. 

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Government likely to change more laws to favor the banking industry

From the Huffington Post and Mary Bottari
With a $4.7 trillion bailout under their belts and no harm done to their billion-dollar bonuses, don't expect Wall Street bankers to be chastened by the 2008 financial crisis. Below we list eight things to watch out for in 2011 that threaten to rock the financial system and undermine any recovery.
1) The Demise of Bank of America WikiLeaks founder Julian Assange is promising to unleash a cache of secret documents from the troubled Bank of America (BofA). BofA is already under the gun, defending itself from multiple lawsuits demanding that the bank buy back billions worth of toxic mortgages it peddled to investors. The firm is also at the heart of the robo-signing scandal, having wrongfully kicked many American families to the curb. If Assange has emails showing that Countrywide or BofA knew they were recklessly abandoning underwriting standards and/or peddling toxic dreck to investors, the damage to the firm could be irreparable.

You can read the full article by clicking here Eight things to watch out for in 2011  and here

This article covers a lot of things that are in motion going foreword to 2011. Read this article here from October 2010 that made similar predictions to give the banks the upper hand on homeowners as government will cave to whims of the banks. There likely will be some law change or rule change that will let the banks off the hook.

Here is a quote from the 2009 article "You can already here the spinning of the bank spokespeople as they once again collude with politicians to try and buy votes in the upcoming election. After Obama vetoed bill that would have given the banks a free pass out of the mortgage fraud quagmire, White House staff was already laying the ground work for another change of the rules to allow banks to steam roll borrowers. They are already working out a deal with a wink and a nod that will lead to another outrageous effort to change the rules of the game in favor of the banks. It should not be any surprise though because the banks have always gotten what they want in the long run. The perfect example was when banks were allowed to move to mark to model to keep them from being insolvent at the beginning of the crisis. The were allowed to "pretend" they were not bankrupt because they no longer had to mark their assets to market. The banks are getting over on everyone. " read more here