San Francisco Chronicle
California appraisers say they're pushed to inflate home prices
Carolyn Said, Chronicle Staff Writer
Saturday, November 3, 2007
Ask any real estate appraiser: Being badgered to overstate home prices is a fact of life, they'll say.
"We get pressured every single day to inflate our values," said Dan Tosh, principal at Tosh & Associates, an appraisal firm in Brentwood. "We get people telling us we'll never work again, or they won't pay us because we won't play ball."...
sfgate.com
..."This makes things such as Enron and WorldCom look small by comparison," said Ted Faravelli, executive director of the California Association of Real Estate Appraisers and principal at San Jose's T.E. Faravelli & Associates, an appraisal firm. "It was an epidemic."
In a nationwide survey released early this year, 90 percent of 1,200 appraisers said they had felt "uncomfortable pressure" to adjust property values. Mortgage brokers were named as the most common culprits, followed by real estate agents, consumers, lenders and appraisal management companies. The increase in pressure was dramatic compared with that found in a similar survey in 2003, when 55 percent of appraisers reported feeling pressured.
"Pressure on appraisers reaches pandemic proportions," said David Hutton, senior editor at October Research Corp., the Ohio company that conducted the study. "The New York lawsuit ... may be just the tip of the iceberg."...
...Still, enforcing the new laws may be difficult for the same reasons Majewski cited: actual proof of coercion is difficult to come by. Appraisers say that requests to fudge the numbers are generally couched in code language.
"They say things like, 'What are you willing to do for us to do business?' - wink wink, nod nod," Faravelli said.
He said his own appraisal business has suffered because he refuses to be what unscrupulous mortgage professionals call "a team player." He has switched the bulk of his practice to working as an expert witness in mortgage-fraud cases....
...Pumped-up appraisals "create what I call phantom equity," Faravelli said. "Appraisals are arguably the easiest part of the entire process to tweak. After all, it's just an opinion, and everyone has one." |
