Aug
25

Appraisers Still Pressured To Fudge Numbers

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August 23, 2008

By Kenneth Harney

Have the real estate valuation shenanigans and inflated home appraisals that characterized the boom years disappeared from the marketplace?

Ask appraisers and many will tell you: It’s still business as usual. Attempts at encouraging inflated appraisals continue to be commonplace, though in some cases the techniques have become subtler.

“Absolutely appraisers continue to get pressured” to hit the numbers needed to push transactions to closing, said Bill Garber, government affairs director for the Appraisal Institute, the country’s largest professional organization representing appraisers.

“That has not changed yet,” added Garber, even though recently signed federal housing legislation toughened appraisal standards and the Federal Reserve’s new truth-in-lending rules ban interference, bribes or intimidation designed to influence appraisers’ valuations.

Gary Crabtree, principal of Affiliated Appraisers in Bakersfield, Calif., says “it hasn’t gone away,” and there are even some developments on the horizon that could make things worse. Starting Oct. 1, a new federal foreclosure-relief refinancing program gets under way that will require lenders to write down the value of distressed houses to 90 percent of current market value to enable borrowers to be refinanced.

Some appraisers “could find themselves under pressure to inflate values” on those properties to cut lenders’ losses, says Crabtree, even though the federal legislation authorizing the refinancing program specifically prohibits interference.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:

http://www.charleston.net/news/2008/aug/23/appraisers_still_pressured_fudge_numbers51614/
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