Financial-data processing company Fidelity National Information Services Inc. said new government regulations that prohibit lenders from using in-house appraisals when assessing loan values could substantially harm its business.
The Jacksonville, Fla.-based company said in a filing made on Thursday with the Securities and Exchange Commission that increasing government scrutiny into the mortgage business "could have adverse consequences that could affect our business."
Yes, because you've been doing so well as of late. But wait, it gets better:
The business of appraising loans has come under a microscope this year as artificially inflated home values became a major part of the mortgage crisis. Lenders realized they'd loaned more than a house was worth and borrowers found they did not have as much equity in their homes as they had thought.
Critics of inflated appraisal values had charged that mortgage companies were more likely to put pressure on in-house appraisers to put higher values on properties.
So in other words, Fidelity is trying to weasel out of new rules that would prevent them from squeezing more money out of people. If someone's home is worth $200k and it "appraises" for $250k, people will take a loan for the $250k. Then, when they go to sell it, they will find out that they don't have the extra $50k that they thought they once had.
With the new rules, Fidelity will have to deal with a home's true value and that's something they don't want, because they won't be able to loan and earn back interest on that extra $50k.
And this is why they need that particular new rule. If they don't like it, they can adapt or go out of business.
Travis
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