Does The Affordable Mortgages Act Of 2014 Reveal The End Of A Trend?

It is said, that when you sit down at a poker table and cannot tell who the sucker is, it’s you. The same principal applies to markets. The …

It is said, that when you sit down at a poker table and cannot tell who the sucker is, it’s you. The same principal applies to markets. The market has just given everyone a big tell. Its name is H.R. 5148 Access to Affordable Mortgages Act of – 2014. If you are thinking about buying, selling, or investing in single-family real estate, and you do not know what this means for the future of real estate, then you are the potential sucker the market desires.

So what does the legislation say? Here it is from
Access to Affordable Mortgages Act of 2014 –

Amends the Truth in Lending Act to exempt from property appraisal requirements certain higher-risk mortgage loans of $250,000 or less if such a loan appears on the balance sheet of the creditor of the loan for at least three years.

Exempts certain individuals required to make such reports from penalties for failure to report any appraisers reasonably suspected of failing to comply with the Uniform Standards of Professional Appraisal Practice, of violating applicable laws, or of otherwise engaging in unethical or unprofessional conduct.

Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to exempt such higher-risk mortgage loans from property appraisal or evaluation standard requirements


So what does all that mean? It means there is a group of people who are pushing the idea that certain mortgages should be made with a reduction of standards so that they are easier to make or obtain. Does that sound familiar? Hopefully it reminds you of subprime loans that later blew up in an epic way.

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Essentially, the bill repeals the inconvenient parts of the truth in lending act so that those who chose not to perform their due diligence can over pay and banks can make very risky loans with their depositor’s money.

Additionally, if a party to the transaction knows an appraiser is doing something wrong and they don’t report it, they cannot be held accountable. This should make loan officers, underwriters, and processors sleep easier while participating in the congressionally approved scam.

Hopefully you are savvy enough to know that members of congress don’t just come up with these amazing ideas all on their own. A lobbyist, working for those that will make money from passage of the legislation, hand it to members of congress who then do their bidding.

If the market is so healthy, why is such reckless legislation required? Hopefully you can answer this question. If you cannot, I’ll help. The market is extremely fragile at the moment.

After nearly a decade on from peak sales and multiple moves to manipulate the market via QE and various legislation, the number of annual homes sales are still 32% off their 2005 highs according to the Federal Reserve data displayed below.

Applying Elliott Wave analysis to the graphed data suggests that the probability existing home sales are going to drop is high. Those that will profit from the legislation must feel the same way about the market or they would not be going to such extremes to keep propping it up. These desperate measures always surface near the end of a trend.

As the number of transactions fell from 2005 to the bottom in 2010, so did prices. I believe the same market cycle sequence is about to play itself out again. There is a ton of money to be made in down markets. Timing your moves and how you make them is crucial.

If you are interested in investing in Las Vegas real estate and would like the insights of a true real estate expert, visit Waqar’s website at or email him at


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