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Four appraisal organizations said today that they don’t think the government is doing enough to ensure independent appraisals of property for mortgage loans.
The biggest of the four, the Appraisal Institute, criticized the lack of attention to appraisals in a recent letter about subprime loans put out by the Office of the Comptroller of the Currency, Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of Thrift Supervision, and National Credit Union Administration. Here’s an excerpt from the Appraisal Institute press release:
"Recent studies conclude that as many as seventy-five percent of appraisers report losing a client or not being paid as a result of their refusal to “push” values. ... “We can’t stand by while those with a vested interest in a transaction try to use appraisers as a rubber stamp ... Additionally, to address this debilitating problem for lenders and consumers, we need help from the entire real estate community to develop and accept an industry-wide statement of ‘best practices’ on real estate appraisal and mortgage lending. With that we start to educate and commit all parties to the importance of an independent appraisal process.”For more from the Appraisal Institute, click here.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.