Welcome to another edition of the Kitchen Sink! Each weekend, while business news takes a breather, Housing Wire highlights interesting and newsworthy stories appearing in media outlets throughout the country as well as interesting blog discussions. Sunday's housing coverage is now included, so dive on in. Saturday, 1/20: "Appraisers furious about automated reports," The Mercury News (Kenneth Harney; Jan 20) A battle-royal over who provides the best valuations is brewing, and it's of the classic man-vs.-machine nature. On one side, we have increasingly sophisticated AVMs; on the other, much more expensive traditional appraisals. As loan underwriting business slows and business for property valuation becomes increasingly focused in loan recovery and transfer, appraisers have been locked out of the market by the impossibly-low fees of automated valuations. And they're none too happy about it. "FEMA extends housing deadline," The Times-Picayune (Bill Barrow; Jan 20) For those who think the crisis of Hurricane Katrina is in the past, the recent news that FEMA's assistance to more than 100,000 displaced homeowners should serve as a reminder of the devastation that persists to this day. FEMA had been set to kick families out of their trailers by the end of January, a deadline that has been extended to the end of August. "Realtors board won't send numbers to state," Naples News (Laura Layden; Jan 20) The Naples Area Board of Realtors is stiffing the Florida state realtors' association on statistics, because they don't think the state association does a good job handling the numbers. Outside the realtor community, there's been a row over the quality of data coming out the NAR in its reports; this suggests the row is starting to affect internal parties, too. Blogspotting: Probably the most discussed post this week was at Calculated Risk, although the post in question was written by CR frequentee Tanta. The post went ahead and poked holes in a Washington Post article that was supposed to highlight the risks of exotic mortgages - a tirade that got the attention of Holden Lewis at Bankrate's Mortgage Matters blog. To say Lewis was skewed and perhaps even tarred-n-feathered for his views on Tanta's take -- and his decision to stand up for a fellow journalist -- would probably be an understatement. All of which, of course, makes for some incredibly entertaining reading. So be sure to read the comments thread. (For the record, this journalist believes that all writers have to be held accountable for the quality of their work; especially so for national media outlets. No matter how nice the journalist may be.) Sunday, 1/21: "Valley fighting mortgage fraud wave," The Arizona Republic (Catherine Reagor; 1/20) Value inflation takes many forms, but probably the most prevalent intentional form of fraud in this area is a cash-back deal. Most in the mortgage biz already know about this dirty deed, but it's interesting to see the media starting to differentiate between shades of grey when it comes to inflated property values. Between inflated appraisals and the brou-haha between appraisers and AVM providers, 2007 is surprisingly shaping up to look like the year of the appraiser in the mortgage business - but it's still early. "Mortgage maelstrom," South Bend Tribune (Jeff Parrott, 1/21) Another look at the inner workings of mortgage fraud, this one shows how the rubber meets the road in so-called property-for-profit (or straw-buyer) schemes. Not surprisingly, Indiana is faced with a rash of this sort of mortgage fraud, and the author alleges that the fraudsters have recently begun targeting unsuspecting immigrants and poor minorities for their straw buyers' scheme. "Mortgage Lenders' license is lifted," The Providence Journal, (Arthur Kimball-Stanley; 1/20) MLN's failure is now the talk of the town in at least eight U.S. states, which have either slapped the troubled subprime lender with a cease & desist order or have suspended the company's state license. The latest to do so was Rhode Island, which said borrowers who had shopped loans with the company were still looking for alternate funding sources. "Farewell to ARMs," Detriot Free Press (Ruby Bailey; 1/21) While this is yet another article looking at the issue of payment shock on rate resets, what's interesting here is that the author isn't talking all gloom-n-doom. She points out something that's always bothered me about the general press' coverage of mortgage exotics -- that most prime borrowers can handle any associated rate resets, and that most properly-executed adjustable-rate mortgages are capped to limit the pain borrowers will feel at a reset point. That's not to say there isn't a problem with exotics -- there is, particularly with the subprime credit sector -- but the problem usually isn't going to sit with prime borrowers who took out capped ARMs. Blogspotting: Nouriel Roubini has a post that's probably going to be ignored by many, if only because most mortgage professionals don't think much about trends in derivative markets or don't understand the implications of the secondary markets on mortgage banking. That being said, his post on the new game of chance Wall Street investors are now taking is downright frightening. If the leveraging he describes is taking place inside housing-related derivatives, particularly subprime deals, things could get ugly very fast if portfolio performance continues to deteriorate (just think of all the subprime deals that are likely already short on loss reserves!).