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Appraisal Fraud Complained about for Years

What’s interesting about this article on the rising problem of appraisal fraud is when it was written – back in 2005, at the height of the bubble.

Appraisers are taking matters into their own hands as they fight back against lenders and other real estate professionals who want them to pad appraisals in order to meet what they feel are unrealistic sales prices of homes. Some are saying that they are sick of reporting fraud to their boards and seeing nothing done to stop it. Others are contacting the FBI where the fraud can be investigated as mail fraud.

Pay particular attention to their prognostications on the nature of the “coming” (now here) crash due to forces other than market forces pushing up prices.  These voices were being drowned out by the likes of Mozillo and other Realtwhores.

Warns appraiser Terrel Shields, “Those of us who do not bend to the kind of blackmail put on us by mortgage brokers have very little mortgage business. And all too often, even review appraisers are overwhelmed by the pressure to rubber stamp these lousy appraisals. The financial day of reckoning will come. When it does it will be like the early 80’s when Realtor after Realtor consolidated, downsized, or disappeared. Allowing prices to be raised, not by economics, but by price spiral caused by increasingly inflated prices from bad appraising and equity milking by borrowers will collapse the market far worst than a normal trend would do.”

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