Lending crisis has many faces

From the Charlotte Observer:

But a wave of home-loan defaults, particularly in the high-interest sub-prime area, tightened lending standards across the country. Like a river in a drought, home-loan money began to dry up.

Rainer, who said she lost nearly 70 percent of her practice, now focuses more on criminal defense and personal injury law.

"It was drastic; it was like the ball dropped," said the 38-year-old, who had to change her spending habits. "I had to beat the bushes to develop those other areas of my practice."

It's true that real estate agents, mortgage lenders and builders are on the front line of the housing market and are most affected by a housing crunch. But a supporting cast also feasts when markets are fat and feels hunger pangs when sales thin -- as has happened in Charlotte the past six months.

They are home insurance agents, inspectors and real estate attorneys, like Rainer. They are home appraisers, like Jeff Taylor, who have witnessed it firsthand.

Taylor, 41, has worked in the field for 17 years. Appraisers' clients, usually lending institutions, need to make sure a property is worth the selling price or close enough to it. So they hire Taylor and others in his field to have a look and estimate values.

A typical appraisal costs $300-$400. It's the key to how much a potential buyer can borrow for a mortgage. Overly generous appraisals have been blamed, in part, for the current housing crisis around the country. This is the worst market Taylor has seen, he said.