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Appraisers Still Feel Pressure

There is a great article by Kenneth Harney in the Washington Post discussing the continuing effects of appraisal pressure. Pinellas County Property Appraiser candidate Frank Gregoire offers his insight in the article:

The obvious intent, according to Frank Gregoire, immediate past chairman of the Florida Real Estate Appraisal Board and an appraiser in the Tampa-St. Petersburg area, “is really to find out: Will this guy play ball? Will he be cooperative when we need him?”

Gregoire says appraisers still routinely receive probing e-mails and phone calls from lenders and brokers designed to elicit the same information: Will an appraiser “pre-comp” a property with a sales contract pending at a specific price? Can that appraiser reach a specific valuation number needed for a refinancing — which may be far out of line with current local property values?

He said, “Things are tough, sales volumes are down, and some lenders know that they’ll eventually find someone who’ll cooperate” — often a newcomer to the appraisal field who badly needs an assignment.

“It’s not easy for some of them to say no, especially when they see business go to folks who everybody knows are playing the game.”

Only when federal and state governments severely punish unethical appraisers and the people who put pressure on them “will all this start to get under control,” Gregoire said.

But he sees some reasons for optimism: State regulators in Florida and elsewhere are increasingly cracking down on appraisers, even stripping away their licenses. And the new federal legislation authorizes the housing secretary to impose financial penalties when appraisers are found to have inflated values.

I completely agree with Frank. A lot of the problems in the real-estate industry can be solved by simple enforcement. Enforce the laws on the books, remove the bad actors from the real-estate profession, and appraisal pressure will eventually become limited and less effective.

-Justin Morton

Comments
  1. CORRINNE LANE

    For every action there is a reaction.Going to the root of the problem would be the Lender who is applying pressure to the appraiser. With no pressure to reach a number, there is no temptation. Times are tough and deals sometimes just do not need to be made. Just look at all the foreclosures and the statistics for a reality check. I have been an appraiser for many, many years and always done the right thing and that makes me a very poor person at times but jail free.

  2. Justin Morton

    Corrinne, I would agree with you that lenders played a huge role in pressuring appraisers. There are laws against “appraisal pressure”, in many states. However, getting those laws enforced is another issue entirely.

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