Appraisal Fraud

Coalition Aims to Stop Home-Appraisal Fraud(December 22, 2005) --

A code of conduct is needed to crack down on home-appraisal fraud, according to the National Community Reinvestment Coalition, a Washington, D.C., nonprofit group that advocates for more capital for underserved communities.

The group has called on the real estate industry, including lenders such as Countrywide Financial Corp. and groups like the CALIFORNIA ASSOCIATION OF REALTORS®, to back the idea. The California Association of Real Estate Appraisers in San Jose, Calif., already has thrown its support behind the plan.

"It's a severe problem and one that's been masked by rising values in housing," says John Taylor, president of the National Community Reinvestment Coalition, which says that rising consumer complaints of appraisal fraud and overvaluation have prompted its effort.

Source: Daily News of Los Angeles (12/22/05); Wilcox, Gregory J.

Ed.'s Note: This is a topic with no shortage of blame to go around. For some reason, however, it's easiest to blame the appraisers.

Without question, there are plenty of "goosed up" appraisals floating around out there, however, does anyone really believe that another creed or code of ethics will really do the trick in deterring the bad apples from churning out lies in the form of inflated appraisal reports? I certainly don't. I do believe that if more punishment was handed out when these "number hitters" are caught red handed then less fraudulent activity would occur. Instead, a code of ethics is a much less accusing way of going about it. At least it makes those who are insistent about its enactment feel good about their efforts.

What garbage! If fraudulent appraisals on which banks & lenders are basing lending decisions on is such a cause for concern, then the first thing that ought to happen is the individual governing bodies should either start enforcing the disciplinary actions that are in place or make the penalties stiffer. Prescribing another three extra hours of continuing education as a means of punishment obviously is not working.