Adjustable-Rate Mortgage Foreclosures on the Way

"Millions of Americans who stretched themselves financially to buy homes face a painful adjustment -- some could even lose their houses -- as monthly payments on adjustable-rate mortgages are reset higher." according to Wall Street's Real Estate Journal.com article by James R. Hagerty. Full Story . . . About one-quarter of all mortgages outstanding are adjustable-rate mortgages that will reset in 2006 or 2007, according to research firm Moody’s Economy.com. For many American households that reset will be a rude financial shock. Most borrowers will be able to cope with the coming wave of resets, in some cases by refinancing with new loans, lenders and mortgage industry analysts say. But some borrowers will have trouble meeting the higher payments and may be forced to sell their homes or could lose their homes to foreclosures. First American Real Estate Solutions, a unit of title insurer First American Corp., projects that about one in eight households with adjustable-rate mortgages that originated in 2004 and 2005 will default on those loans. "Regulators are pressing lenders to tighten their lending standards, which probably will make it more difficult for some people to qualify for refinancing. And some credit-card companies have recently started requiring higher minimum payments. Energy costs are up sharply, too, as are property taxes. " Source: The Wall Street Journal, James R. Hagerty (3/11/2006) What Does This Mean To Real Estate Appraisers? It could mean even MORE pressure to inflate home values. This pressure comes in many forms :

• the withholding of business if we refuse to inflate values,
• the withholding of business if we refuse to guarantee a predetermined value,
• the withholding of business if we refuse to ignore deficiencies in the property,
• refusing to pay for an appraisal that does not give them what they want,
• black listing honest appraisers in order to use "rubber stamp" appraisers, etc.