What the pundits want you to buy into is that some how the price of homes were being driven up for no reason what so ever and it reached this magical ceiling and it all came crashing down. How do we fix the problem? In order to jump start the economy we have to roll back the value of these homes. Roll them back to what their value was on July 2008 before the Democrats got together and burst the housing bubble!  

We have been told for months even years that it is the housing bubble that burst on to the scene a few years back. We have been told that the greedy lenders caused all the problems. Basically they loaned money to families to buy a home and they could not afford the home.

Have you seen the ad by a real estate group that states something about the sale of one home creates one job? So the discussion today will focus on how the bursting of the housing bubble was not related to the economy. In other words, what the pundits want you to buy into is that some how the price of homes were being driven up for no reason what so ever and it reached this magical ceiling and it all came crashing down. So a house that was worth $100,000 in July 2008 was worth about $66,000 in August 2008. That's 30 days later. This column will prove that the reduction could not happen due to market conditions. 

Now for the average Joe, this doesn't make any sense does it!

For Obama and his cohorts when they are not out playing golf can't quite figure out how to fix the economy. All they have to do is look in their own backyard, or better yet your backyard.

Let's get a little emotional here, If you are paying the mortgage on a home that you purchased for $100,000 and now find out that you are paying a mortgage on a home that is magically worth less than what you paid for it, how does that make you feel?  And should you continue to pay the mortgage?

If you are not happy now, just wait a few minutes and find out who stole the $30,000 of asset from you and your family! And what does this all mean to the economy!

First off in my famous book I reveal real numbers and proof how the Democrats burst the make believe housing bubble so that the Democrats could win the Senate, House and the Presidency in 2008. Dr. Phil offered all kinds of proof. And if you want to see the appraisals etc. you can see for yourself that there was no bursting. The banks got together and screwed the same folks that paid for the alleged bailout. If you need to see the proof just email me.

Today we will discuss another transaction but this occurred in York Pa. But the place just adds credence to the issues, but this appears to be happening any where American banks are loaning money for mortgages.

If you are involved with investing in real estate which to some degree we all are, it is important to understand what is going on and how to fix it. York is a city that is no different then most cities. They have many residential properties that are bought by investors who bring them up to code and rent them out. This takes money and in the end, the investors want to end up with a mortgage to take the money out of the building and invest in other properties. This is called leveraging your money and this is how you can make a good living by using the banks' money.

What the banks are doing is using appraisals that are low balling the value of the home you are trying to mortgage. Let's put it in simple terms. Let's say the house is worth $100,000. The bank says your credit is good they will give you a mortgage for $80,000. They send out their low balling appraisers and they say the house is only worth $60,000. If you are an investor and want to get your cash out, then the appraisal may come in at $50,000.

In the end this is great for the bank. There is more money in the deal. So they minimize their losses. But it is bad for everyone else. Do you have $40,000 to put down on a $100,000 house? Would you pay and invest the down payment if you weren't sure the banks wouldn't low ball it again. How do we fix the problem? In order to jump start the economy we have to roll back the value of these homes. Roll them back to what their value was on July 2008 before the Democrats got together and burst the housing bubble! 

So it is good for the rich. They can buy up these houses. But that's not what is happening. If there were enough rich folks that wanted to deal with so many units it might happen. There just aren't enough rich people and enough people to rent them to make it worthwhile.

So the bottom line is the appraisal. The purpose of the appraisal is the guesstimate what the house would sell for.  There is only one person in the whole world who would know what the house will sell for. That is the buyer when he buys the house. If this wasn't true, then why doesn't an appraiser have a rating? We need a rating that would indicate how close the appraiser comes to guessing how close the house was going to sell for. The crazy part is that there is a guy in York who is an appraiser and he looks forward to testifying against other appraisers if their appraisals are too high. That's not good for York's economy.

How do we fix the problem? In order to jump start the economy we have to roll back the value of these homes. Roll them back to what their value was on July 2008 before the Democrats got together and burst the housing bubble!  And this really costs nobody any money and you will create millions of jobs. And pretty much eliminate almost all the foreclosures. Obviously it doesn't apply if you don't have a job because you can't pay your mortgage. You would need to find one of those imaginary shovel ready jobs of Obama!

Mayors like Mayor Bracey of York should sit down with all the local banks and ask to fix this problem. York just like Pottsville and other places in the country need to have fair appraisals. If banks like Wells Fargo are going to use low balling appraisals then the applicant should be allowed to get another appraisal and should be forewarned that this bank uses low balling appraisals. If the community knows which banks are using appraisers that are fair, then people can flock to those banks and give them all the business they need.

If the mayors and politicians don't sit down with these banks this is what will continue to happen: There will be more vacant buildings in the communities. There will be more people living rent free in their homes while the banks get around to foreclosing on the inhabitants. Investors will not spend their hard earned money on renovations and new investments and more houses will end up not being occupied. As a result the values of the homes will go lower. Not because there is less value, but because when they are vacant they end up being destroyed by vandals and the elements. The banks are not very bright at times. They don't secure and maintain their vacant buildings, that is why they are letting more and more people stay in the buildings rather then foreclose on them and leave the house vacant. This also results in the rents going up because there are fewer houses to rent. This also results in property taxes going up because there are fewer houses paying real estate taxes. On all those foreclosed properties there are not too many people paying the property taxes!

That could be the leverage the bank needs. If the banks don't quit low balling the appraisals, then the cities will foreclose on the properties the banks have foreclosed on for failure to pay the property taxes. Imagine if the banks were required to pay all those property taxes, bet those appraisals would go up real quick.

As a result of bringing the appraisals back to where they should be there will be millions of jobs created. People will be able to refinance their homes so they will have more money to pay off their credit cards and buy big ticket items, tuition and cars.

This will all help the American economy!

If you wait for congress to do something, well they don't seem to be struggling with their finances except for Weiner. The banks have to stop low balling the appraisals. It serves absolutely no purpose but to hurt the economy and your community. If they want to low ball the appraisals they should be required to acknowledge that up front so we can go elsewhere. It is time to get the economy moving again, and it could be fixed in a matter of minutes. It may take a little arm twisting with Fannie Mae and the other crooks in the industry. But this solution is so simple and it doesn't cost the taxpayer anything.

Actually if the rents continue to go up, that means the section 8 folks will require more taxpayer money to pay the rent if you do nothing. There is plenty of evidence of low balling appraisals out there. If you need one, send me an email. My book covers the real estate market in more detail and makes it clear how the mortgage industry is the backbone of our American Dream. We can't allow greedy banks to take that away!  For liberals and capitalists there is a God given right that is the right to feel secure in your economy. That is an economy based on a safe and secure real estate market! Wouldn't you rather feel safe and secure in your home than have FREE Obamacare!