Let's not forget the brokers' handmaidens, the real estate appraisers, who too often buckled under pressure from lenders to overvalue houses.
Paul Demos, a Chicago-based appraiser, accepts some culpability for his trade. "Lenders would tell appraisers, 'This is the value we need for the loan to work,'" he says. "And appraisers would do it." That's kind of the opposite of how they're supposed to work. But, hey, whatever. It's a judgment call, right? Except nobody is exercising any judgment. In comparison with the other participants, though, the appraisers come across as bit players.
Appraisers
|  Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall. (more)  Fortune's Peter Gumbel investigates how Germany's IKB Bank became the biggest international victim of America's subprime-mortgage crisis. (more)  Home-loan default rates across the U.S. have nearly tripled since 2006, especially for subprime loans. And with $850 billion in adjustable-rate loans scheduled to reset by 2008, defaults are likely to rise even higher. (more) |
