Financial News

The current housing bubble burst was the perfect combination where almost every industry had a hand in contributing to the meltdown. One such party that had a hand in the situation were home appraisers. Home appraisers went to many a homeowners property, provided banks with escalated home value numbers, the banks loaned money on that amount and then homeowners could not afford to repay the debt and defaults increased. New rules will go into affect to limit this from happening. Many appraisers suggested that they only escalated the figures as they were buckling under the pressure mortgage brokers and lenders.

Real estate appraisers are used for a variety of mortgage business. Appraisals are helpful tools and may be required when first evaluating a home for sale, for refinancing a mortgage and any other situation where a home value would be needed. For a long time consumer advocacy groups have been lobbying against some of the existing home appraisal conditions as they promote a conflict of interest. That thought specifically applies to lenders who either financially control or own in-house appraisers.

In February of 2009, new action was put into place in response to lawsuits filed against Fannie Mae and Freddie Mac. Starting in May of the same year, new rules will be in place separating the relationship between mortgage and appraisal companies. According to the FHFA , "the Home Valuation Code of Conduct applies to lenders that sell single-family mortgage loans to the Enterprises beginning May 1, 2009 and will help assure that borrowers, home buyers and secondary mortgage market investors receive fair and independent property valuations."

As long as the code prohibiting any "employee, director, officer, or agent of the lender, or any other third party acting as joint venture partner, independent contractor, appraisal company, appraisal management company, or partner on behalf of the lender, shall influence or attempt to influence the development, reporting, result, or review of an appraisal through coercion, extortion, collusion, compensation, inducement, intimidation, bribery, or in any other manner" are enforced, great improvements to the industry will be made and felt by all.

Recently, taxpayers have taken part in tea parties around the country to protest increased taxes that they believe are meant to pay off bailout debts. No one wants to be responsible for someone else's mistakes, right? But it turns out that taxpayers may have their information a little skewed.

Most Bailout Funds Untapped

According to reputable tracking sources like ProPublica, much of the bailout funds haven't even been tapped yet. For example, of the $1.5 trillion allotted to banks through the FDIC's Temporary Liquidity Guarantee Program, only $297 billion has been used so far. But what's really interesting is that banks are required to pay between 0.5% and 1% in interest in order to borrow. This means, they're responsible for paying back their own debt - with interest.

So why are taxpayers thinking the worst? Probably because they feel betrayed by a failed financial and housing market that resulted in a loss of jobs, financial securities and foreclosures. Also, it doesn't help that some companies used the bailout funds they were given on bonuses and lavish outings. In other words, it's hard to know who to trust anymore.

How Will Bailout Debt Be Paid?

But the truth of the matter is that increased taxes aren't exactly in direct correlation with bailout debts. So while the tea party participants have plenty of reason to be upset about paying more taxes rather than being bailed out of their own financial disasters, unfortunately, their anger may be a bit displaced.

Many banks are unwilling to tap government funds in exchange for more regulation of their business structure, including executive compensation. How do you feel about the bailout now knowing that only a small percentage of government funds allotted to propping up the banking industry have been used? Will this affect your banking choices?

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The Flood of Applications

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