When In Doubt, Blame Others

The National Association of Realtors wants to make it very clear: if it weren't for stingy mortgage bankers and certain appraisers, home sales would be better. In its new monthly release on existing home sale activity the trade group – a key defender of the mortgage interest tax deduction – blamed tight mortgage credit and low appraisals for scotching deals. We only point this out because, historically, it usually doesn't tread on its comrades in housing finance and appraisals, at least not publicly and by going on-the-record. But NAR's president Ron Phipps couldn't be clearer. In a prepared statement he blamed "overly tight" mortgage credit, adding that, "A return to common sense loan underwriting standards would go a long way toward achieving responsible, sustainable home ownership." But perhaps, Phipps shouldn't be talking to mortgage bankers. Instead he may want to talk to Fannie Mae, Freddie Mac, and the Federal Housing Administration. Without them, there is no primary market. As for "add on" fees, it might be argued that lenders are just trying to make as much money they can on each loan to build a fat cushion for loan buyback requests, which come from the GSEs. It's a crazy mixed up world, indeed…