Here’s a nice little article discussing appraisal pressure, from the Virginia Pilot:
For several years in the mid-2000s, Fincham said, his company, FM & Associates, did steady business with a Virginia Beach mortgage brokerage but faced escalating pressure to deliver inflated appraisals.
“They would get on the phone and scream at me to inflate values,” he said. “They said, ‘If you keep coming in low, we’re not going to work with you anymore.’ ” Finally, the brokerage delivered on the threat, cutting off business with Fincham’s company.
“They said, ‘You’re not hitting the numbers we need you to hit,’ ” Fincham said.
The National Association of Mortgage Brokers have a different take:
Mortgage brokers, on the other hand, put the onus back on appraisers.
“The appraisers have to step up here and take the high ground,” said Marc Savitt, president of the National Association of Mortgage Brokers. “I understand a lot of them have been threatened with loss of business and so forth. I’m not saying it didn’t happen.
“If they get pressured, they need to report it to the appropriate regulator. That’s the first thing. The second thing is, if they do commit fraud, then they have to understand there’s consequences for that, and just because somebody tried to influence or pressure them, that’s not an excuse for committing fraud.”
So evidently, it’s the appraisers fault for being pressured. Who knew?
It would have been nice to see these articles four years ago, when it might have made a difference. But still, better late than never. The key going forward is enforcement of appraisal pressure provisions. As Bill Garber says in the article, “Enforcement is key. It’s going to be incumbent upon the regulatory agencies to keep this issue on the front burner.”