Expert: Karyn Foley - 4/8/2011

Question
Hello, we purchased our home over four years ago, and with the fallout of the real estate market, we have been realizing more and more that we were definitely a victim of what has happened. I was a first time home buyer, and I think that I was really mislead during the process, more so by our realtor and finance company. So my question, is there anything I can do now, considering we already own our home and signed on the dotted line...four years ago, if we feel that our house was appraised inappropriately to secure financing? Looking back, there were so many red flags, but we just wanted the house, and we were not supported by our realtor who was very aware of the situation. When we were in closing (we did not have an attorney present)our broker said that the "appraiser really had to work hard so we could get it to what we were purchasing for." He said it to someone else of course, and then the response from our realtor "I just want my check." I know that the house must appraise for what we were financing or more to secure the loan. So now, it all makes sense!! We lost money the day we purchased, and NO ONE was our advocate!!! One  more thing, when we went to qualify for our loan, I had originally wanted a house that was more than the one we purchased, I asked our lender if we would be able to quality for the more expensive one....he replied "honey, you can have whatever house you want!" That is exactly what is wrong with this entire system. That is what put so many people into the situations they are in now, luckily we knew better, but still were taken advantage of. Do you know....is there anything we can do now?

Answer
Dear Marie:  There are many, many people in your situation.  Either by buying a hone and not having a crystal ball to tell them that the boom cannot last forever.  Or, buying stocks and bonds - or other investments - and having them go down in value as well.  If you bought your home strictly as an investment, you must have recognized that investments are always subject to risk.  They go up, they go down.  You take a chance and that is why a smart investor is diversified.  Most people buy their principal residence for the long term;  it was to be a place to live in, raise a family in, enjoy and so forth.  If you think you were lied to, subject of a cheating scheme, or a victim of deliberate malfeasance, then I suggest you consult a real estate attorney who can explore your legal options.  You need legal assistance in order to learn if you were truly an uninformed victim of another person's illegal business tactics. If not, then you might just have to wait the market out until things improve.  If you explore the history of real estate, you will see that there are peaks and valleys.  What is also wrong with the system is that people are quick and happy to jump aboard an opportunity to make a lot of money without thinking about what can or may occur further down the wrong.  We are all a little greedy and delighted when things work out for the best.  It is hard to take the brunt of disappointment when things do not work out well.  Good luck,
KARYN FOLEY