The return of mortgages that cover up to 100% of the purchase of a home has brought back an old ghost from the past, the of the inflated appraisals. Need to sell homes and mortgages now that the wind blows in the face. Yes, you run the risk of re-committing the same mistakes of the boom years, when home sobretasaron 30%, according to the study The true price of housing in Spain, by professor Josep Maria Raya.
The appraisers were accused of inflating the ratings during those years, and now are, again, identified with the finger. "The banking returns to grant mortgages for 100% of the value of the home and for that they need the participation of the valuation," says analyst and economic consultant Gonzalo Bernardos. "This type of mortgage is achieved by the channel wholesaler, through credit institutions with a significant volume of customers," he added. Called "mortgages social" for young people, because they help this group of people without savings can access their first home.
"The mortgages to 100% of the price, allowing the purchase of a house to a lot more people but raise prices and encourage appraisals swollen. From the moment that some banks have become to offer them, unfortunately, have become inflated appraisals," appraiser David Fernandez, who last April 28, he sent a letter denouncing these practices to the Bank of Spain.
The root of the problem is that, with few exceptions, the bank does not finance more than 80% of the appraised value of the home. The buyer should have saved the remaining 20% plus costs. If you do not have that money and needs financing for the total price of the house should have the luck of the appraised value of the home you will buy is fairly higher than the price that you will pay for it, so that the 80% of the appraisal corresponds to the 100% of the purchase. In some cases, it may be that the buyer has such a fortune. In others, not. "It is naive to think that all the houses that you're going to mortgage are a 20% discounted with respect to the value of the market," argues Fernandez.
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Then, you lose the operation or you get an inflated appraisal. In order to do so the appraisal value has to be greater than the purchase price. How much? "Mortgages 100% work thanks ratings 20% higher," says Fernandez, who adds that "an appraisal if it is well-made should be similar to the purchase price". They do so, above all, "the little valuation with little turnover and is not widespread, although it is becoming more frequent", says Gonzalo Bernardos.
How do you get? With an appraisal commissioned by the buyer or by the financial intermediary. Banks usually have a system of choice of adjusting random, although some of them admit of reports commissioned by the client. "The intermediary companies hire directly to appraisers who know that they are going to issue the value they need," says Fernández. "Where your bank does not arrive, we do," reads the slogan of one of these financial intermediaries have proliferated in recent years. "Mortgage specialists to 100%", announces another.
The bank is restricted to verify that the financing does not exceed 80% of the appraised value. "The bank manager does not assess if Betgram it is swollen or not," says Fernandez. Although this appraiser admits that on occasion these practices are done in collusion with the directors of the bank office that "they have to meet targets". Something that could change with the new mortgage law, which last the Government, which aims to decouple the massive sale of mortgages with the delivery of a bonus to the template.
The appraiser also denounces the pressure they sometimes exercised by companies of financial intermediation, and real estate agents. "Some call you to complain and say: 'is that so if all appraisals come in around the price of sale, do not sell just houses," he said. But the reality is that "adjusting lives of errands, and if you do not swells the value, you run the risk of not hiring". Luckily, it recognizes that not all estate agents are the same. "They are the life-where he works serious people, and others that appear as mushrooms in the cycles of economic good, whose workers are not as trained and just looking for their commission at the expense of appraisals swollen."
On the other side of the river are the appraisers and the Bank of Spain, and both deny the greater. The two large, Society for Appraisal and Tinsa refer to the Spanish Association of Value Analysis (AEV). "There has never been a widespread inflation of appraisals. During the years of the housing boom, appraisers are reflected in their reports the reality of the market, as who introduces a thermometer to measure the temperature. The market itself was overheated and the appraisers reflected that reality. And neither today are given this type of fraudulent practices and, if they occur, must be attributed directly to a professional malpractice on the part of a valuer particular", pointing to Dove Arnaiz, general secretary of the AEV. Remember that now "there are untying shareholding between appraisal companies and financial institutions or any other market participant that may generate conflicts of interest (real estate developers, agencies processing mortgage...)". In addition, they must have an internal code of conduct to regulate, among other issues, relations with the financial entities that rely on the custom jobs that represent more than 10% of its turnover.
For its part, the Bank of Spain notes that "have not detected signs of overvaluation intentional of property by the appraisers in order to complete operations by keeping LTV (loan to value) below 80%". And remember the controls that have been put in place after the bubble. The Bank of Spain monitors these assessments via a database that allows comparisons to be made and when it detects a significant deviation within a zone for real estate similar you send a written to request explanations from the adjusting; has worked with the two associations of the sector (anti-tax and ESMA) to develop a manual of good practices that will unify the criteria and have expanded the supervisory resources devoted to the valuation. "This year we have begun to make on-site inspections, which will be expanded next year," told from the agency.