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Too small to fail? Time to call your Senator

nohvccWhile Senators Dodd and Shelby are discussing the Financial Reform bill on both TV and behind closed doors,  TBTF -Too Big To Fail is of primary concern in their macro vision.

But, what about all that has happened in the past few years?  Foreclosures, Short Sales, Modifications, Unrefinancing…..the issue is really TSTF- Too Small To Fail.

The Congress needs to put into the bill law that will get the day-to-day world of Americans that mostly did not choose to be in a negative position able to get their issues squared away quickly and not take the economy down further.

First- repeal the HVCC.  Unbelievable but true, the amount of inaccurate appraising and appraisal fraud has INCREASED since HVCC.  HVCC does not work.  Lenders need to have their own approved appraiser list and make the appraisals transferrable (among other things). DUH!

Short Sale Approvals should happen within 30 days after a full package is submitted.  Legislate it, that’s the only way to get B of A and other banks to crank.  Also, have mortgage brokers/bankers allowed to package the Short Sales because they are the ones that know how to do it. DUH!

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Loan Modifications- These are also known as refinances.  Have all mods go through licensed mortgage people and not the scum and scammers that have been doing it.  I sell loans directly to wholesale lenders, why can’t I just package a loan and get it approved in a few days?  DUH!

No Appraisal Refi- How about people who have 750 credit scores, plenty of income and just have a house underwater and a 6.5% loan?  Now, they can’t refi.  How about if they could and then save money each month that can be put back into the economy?  DUH!

Call your Senator and let them know.

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Written By

Realty Reality! That describes Fred, a sharp witted and outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace along with being quoted in the New York Times, The Wall Street Journal and other media outlets. Fred is the CEO of U S Spaces, Inc/Arrivva (a real estate brokerage firm in PA, NJ, DE and CA) and U S Loans Mortgage Inc (mortgage brokerage in PA, CA, FL and VA), and serves on the Board of Directors and is the Federal Legislative Director for the UpFront Mortgage Brokers. Fred is also the co-creator of real estate startup, a mathematically driven rental search engine. See everything Fred at



  1. HowardArnoff

    April 25, 2010 at 12:58 pm

    Fred, it amazes me that refinancing requires an appraisal with the likelihood that the borrower, bank, housing market and economy will all benefit. No cash out’s please.

  2. Ben Goheen

    April 26, 2010 at 2:10 am

    Fred: As an appraiser, I’m completely opposed to the HVCC but know that it won’t go away by complaining about it OR even signing an online petition – has that ever worked? What evidence do you site for saying that inaccurate appraisals and fraud has increased?

    Howard: Why does it amaze you that a lender would want to know the current market value of the asset they’re loaning money on?

  3. HowardArnoff

    April 26, 2010 at 5:53 am

    Ben, maybe amaze was the incorrect word but the money is already loaned. And correct me if I’m wrong because I’m not an accountant but if they found out due to an appraisal that the asset was worth less than they originally valued it, do they have to write it down on their financial statement. If so, ah, I get.

  4. Fred Glick

    April 26, 2010 at 8:10 am

    Ben, There are actually 2 studies that reached this conclusion. I am happy to send you details.

  5. Ben Goheen

    April 27, 2010 at 1:46 am

    Fred: Yes, I’d like to see those reports. The link you just cited was written after this article – do you have insider information? 🙂 The report is very interesting but I believe blows it out of proportion a bit. While appraisal fraud has increased, it’s still nowhere close to the amount of application fraud (59%). The press release also states that “the continued increase is believed to be attributed to better industry reporting and policing.” So the increase of appraisal fraud reporting might be directly linked to the HVCC.

    Howard: I’m not an accountant or lender, so I can’t tell you what their procedure is on declining assets. I’m sure a majority of homes are worth less then their original 2004-2007 appraised value. It doesn’t worry them much unless the borrower stops paying the mortgage. I’ve personally seen very little cash out refi’s happening lately. The last one I did, the borrower was taking out $50k on his paid-off $800k home. Needless to say the lender wasn’t worried about the appraised value on that one.

    • Benn Rosales

      April 27, 2010 at 12:12 pm

      You didn’t have to be an insider (although Fred ‘is’ in the know) to have that information (we got the tip on Friday of the report), it’s been a topic of discussion for almost a week on the heels of the released report on Monday.

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