Thursday, October 16, 2008

And so it begins...

One of the reasons I don't hold most people accountable for being underwater on their mortgages is that I think the evidence is pretty compelling that lenders were not operating in good faith. Consumer's are dependent on appraiser's expertise and judgment when determining what their home is worth and it's a conflict of interest for lenders to pressure appraisers. Yet that appears to have happened on a rather systemic basis.

I have wondered aloud why large class-actions haven't arisen as homeowners try to save their houses and their own credit by claiming that the mortgages they were sold were fraudulent. It seems to me that they would have pretty good legal and moral grounds for that claim. So new that appraiser's have opened the can of worms themselves and sued countrywide for unfair business practices in pressuring them to inflate home appraisals is a good sign.

And before anyone starts with the "it's your responsibility to educate yourself about home prices" blah blah.. shut the hell up unless you are willing to apply that standard to every aspect of your life. Our legal system and society is dependent on people operating in good faith. It's not an esoteric dream, it's an actual legal concept implicit in all contracts. Without it, the free market we all know and love doesn't work. We all benefit from it.

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