Ben Jones of “The Housing Bubble 2” beat me to the punch on this story (how does he make so many posts each day?), but since it was reported by a local outlet (KING 5), I thought it would be good to post here. It really isn’t a particularly local story (except for one local example), but it is still interesting:
Owning a home in western Washington is like sitting on a gold mine these days, but how do you know what your home is really worth? Appraisal experts and consumer advocates alike are now sounding an alarm about a startling problem that could have you borrowing more than your home’s actual value.
As if homes around here aren’t already expensive enough without having to worry about this sort of thing.
When an appraiser overvalues a home that can lead to an upside down mortgage where you end up owing more than the property is worth. “This is a major problem,” says David Callahan, with an advocacy group called Demos that recently looked into just how widespread the problem is.
Callahan says research shows the numbers are staggering. “More than half of appraisers say they have been pressured to inflate the value of a home.” Mostly they have been pressured by mortgage brokers and lending institutions, according to Demos’ study.
It all comes down to one thing—greed. Greed, greed, greed.
(KING 5 News, 08.22.2005)