From the People that gave you the DMV and the Post Office, They are at it again!

Government Sets New Rules for Appraisal of Property

The Federal Government in its infinite and ever changing wisdom has messed with the Free Market once again. This time its a blow to home sales in the making. This comes at a time when the government is supposedly trying to get as much real estate sold as possible or at least keep people in thier homes. I think that was the idea we were all sold to print 2 trillion dollars and give to AIG, Bank of America, Meryl Lynch, Countrywide, Wells Fargo, Citigroup, Washington Mutual and the list goes on!

What they have done now is change the rules on property appraisal. So how is that going to play itself out in the market place? Simply, The old rule was that two people would go into contract to sell and buy a property. Mr and Mrs. Smith would sell thier house to Mr. and Mrs. Jones. They both agree on a price and Mr. and Mrs. Jones qualify to buy it at the agreed price. Typically, Lenders would hire an appraiser who then looks at comp sales in the area and writes an appraisal that would justify the purchase price. Obviously Mr. and Mrs. Jones, ( and I say this without knowing them personally) are not complete idiots and have shopped the market and know that they are getting a good deal. The appraisal should validate that decision. Right?! WRONG! Enter the NEW Federal government lending and appraisal rules required of Frannie Mae and Freddie Mac. ( Both of which underwrite about 60% of all home loans in America)

THE NEW RULES

The lender and the appraiser can have no relationship and no contact. The appraiser is literally pulled out of a hat in a lottery who then appraises the property. What if the appraiser has no experience or knowledge of the area that he is being asked to appraise? TO BAD, SO SAD, Go to Jail..Do not pass go,, DO NOT collect $ 200 or likely get a loan! This new rule is already KILLING sales and keeping property which value is being set by the selling price to not be appraised correctly by a knowledgeable person. The result is that people cant get loans to close.. THAT means that deals are going sideways that otherwise would have closed with new buyers.

There is emergency legislation being drafted to present to Congress to fix this ridiculous and business killing rule. Be watchful as it makes its way through PELOSILAND via Barney Franks House Committee on " How to run a free market when I have never worked outside of Government a day in my life" If you care about Real Estate you should call the Insane Asylum that is our current US Congress and demand that your representative SUPPORT Free Enterprise and Free Markets and stop meddling in the process. Business and and Free Markets which create efficiency and lower costs for all require fair and steady regulations that are not constantly changing at a politicians whim. It also requires that government stand aside and only intervene when injustice takes place, not to use the law to penalize one group or another based upon thier voting patterns.