As appraisers, we sometimes get caught up in the minutiae of our profession without taking some time to step back and look at the big picture. What I mean by this is simple. Without the supporting documentation provided within our appraisal reports, a mortgage will not be consummated. No loans would be processed.
However, when the mortgagor does acquire a property, based upon our valuations, it is their responsibility to pay according to their agreement. During the sub-prime heyday, many people did just that. However, when their balloon burst, and they couldn't pay, the result was a serious hit to the financial markets (as perceived by the media).
The attached article written by Helen Huntley of the St. Pete Times http://www.sptimes.com/2007/09/06/Business/Recipe_for_a_mortgage.shtml does a great job of reducing this whole process into bite size chunks, so we can understand what happens when these faulty loans form the base of many asset backed securities. It is a sober reminder of the importance of the service (or in some cases disservice) we provide our clients.
John Huston
Florida St. Cert. REA RD-6006
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