{"id":992,"date":"2007-07-31T09:40:26","date_gmt":"2007-07-31T16:40:26","guid":{"rendered":"http:\/\/seattlebubble.com\/blog\/2007\/07\/31\/appraisers-pressured-to-hit-the-value-every-time\/"},"modified":"2007-07-31T09:41:33","modified_gmt":"2007-07-31T16:41:33","slug":"appraisers-pressured-to-hit-the-value-every-time","status":"publish","type":"post","link":"https:\/\/seattlebubble.com\/blog\/2007\/07\/31\/appraisers-pressured-to-hit-the-value-every-time\/","title":{"rendered":"Appraisers “Pressured to Hit the Value Every Time”"},"content":{"rendered":"

And the understatement of the week goes to… Aubrey Cohen of the Seattle P-I, for his sub-headline gem: “As market slows, buyers may find they paid too much<\/a>“.<\/p>\n

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Moss blankets the house’s roof. The siding is rotting off. And mold has spread through the interior.<\/p>\n

But the home’s condition is “average,” according to an appraisal.<\/p>\n

It’s one clear example of how many appraisers hide problems and affirm inflated prices willingly or under pressure from the mortgage brokers and bankers who give them business — calling into question whether home buyers are getting what they pay for.<\/p>\n

“We’re pressured to hit the value every time, every single sale,” said appraiser Richard Hagar, who showed pictures of the mossy house while teaching a class on mortgage fraud earlier this month for 25 appraisers, mortgage brokers and real estate agents.<\/p>\n

It’s a problem that is more common as buyers vie to outbid each other in recent go-go markets such as Seattle’s. And increasingly buyers may find in coming months that they paid too much, as slowing appreciation and rising mortgage interest rates force them to sell at a loss.<\/p>\n

“I think we’ll see it come to a head here in the next year or so,” said Ralph Birkedahl, manager of the state’s appraisal program. “We may see more foreclosures than we’re seeing now.”<\/p>\n<\/blockquote>\n

I don’t really understand why the appraisal process works the way it does. Wouldn’t it remove most of the opportunity for corruption like this if the lender was only allowed to work through a neutral third party to hire an appraiser? It could be “appraisal escrow.” The process I’m imagining would go something like this:<\/p>\n

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  1. Buyer makes offer on home.<\/li>\n
  2. Buyer submits offer and house details to lender.<\/li>\n
  3. Lender sends house details to appraisal escrow.\n