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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (17991)	8/28/2002 12:58:31 PM
From: Frank Pembleton	Read Replies (1) \| Respond to of 36161

...any comment about what he said? :) Regards, Frank P. Keeping up with the Dow Joneses Setting aside stock manias for a look at the housing variety, I would just point out the implications of a recent story in The Wall Street Journal called "Come On, My House Is Worth More Than That." This is a potentially frightening look at the extent to which people are pressuring their appraisers so they can maximize the money borrowed against the value of their home. One appraiser said a prospective client warned, "If you're not going to come up with the number I want, I'm not going to pay you." These threats are becoming increasingly more common. As if to put an exclamation point the kinds of things that are taking place, the story winds up with the following quote from a Des Moines appraiser, who received a call from an unhappy homeowner: "With my appraisal, the bank wouldn't give him sufficient money to buy the boat he wanted. I said, 'Buy a smaller boat.' He didn't like that answer." Now, not being in the mortgage business, I don't know how prevalent these stories are. But I continue to hear such accounts of how people are using this money to continue to fund a good life that's beyond their means, rather than to lower interest costs. If the bulk of these refinancings are being undertaken by the former, that will be a huge problem down the road, guaranteed. When the housing bubble bursts, all these people that are leveraged up will find themselves in a tremendous amount of trouble.