i know i’ve been banging the same drum a lot lately, but i continue to be fascinated by this housing price “miracle”. this is an article i have been waiting for, because i have only read and heard bits and pieces about this practice:
More than half of U.S. appraisers say they have felt pressure to overstate the value or condition of a property, according to a survey released last year by October Research Corp […] Appraisers have testified to threats from loan officers and mortgage brokers saying they won’t pay for the appraisal or won’t give them more work if the value of a home doesn’t “hit the number” that they need to make the deal.
Wayne Romain of the Appraisal Firm, based in Phoenix, said appraisers are getting the blame for high housing values, but everyone in the home-buying process is part of the problem.
“Appraisers are pressured by the home buyers, the sellers, the lenders and the real estate agents,” he said. “Now home buyers are paying well over appraised value, acting out of passion or desperation, not need. Home sellers think their homes are worth more than they are.”
He said real estate agents often avoid disclosure on houses’ problems, and mortgage lenders shop appraisers for values that make a deal work.
that is FUCKED up in so many ways. the idea that LENDERS are forcing appraisers to exaggerate the value of assets collateralizing the loans they are making is irresponsible to say the least (i have downgraded this from “FUCKING INSANE” for the sake of rational discourse). when was the last time you walked into a pawn broker and had the “loan officer” haggle to pay you MORE for your saxophone?? (ok, slight oversimplification). in the real world, this little bit of chicanery is not in the long term best interests of any of the parties involved except the agent. jesus even the homebuyer, who is going to pay higher property taxes on the basis of the inflated appraisal, is pressuring and cajoling for a higher price. we are living in an upside down world.
if this practice were occuring in a company, it would be called forcing the accountant to cook the books. only there is no single kenny lay or bernie ebbers. as wayne romain said in the quote above (and you gotta love that name) everyone in the home-buying process is part of the problem.