Several States are cracking down on lender and client pressures on the real estate appraiser to "Hit" a number in their appraisal reports to make the deal work.New York's Attorney General Andrew Cuomo has been investigating mortgage fraud.Freddie Mac and Fannie Mae have agreed that they will no longer buy loans that are originated by lenders who do not follow a strict code of ethics and procedures when it comes to ordering appraisals.It starts at misdemeanor level and rises to a Felony conviction if Lenders, Mortgage Brokers, Realtors and other clients, meaning buyers and sellers try to pressure appraisers to make the numbers work by appraising their properties over their true market value.Appraisers have been under lender pressure since day one and unfortunately in order to keep their jobs, many appraisers had to buckle to the pressure. Unfortunate, but reality. Many others stuck to their guns and went out of business. A real tragedy.Appraisers are hired by lenders and other clients to give them their professional opinion of value, however this process was turned on its head and the lenders and others were telling the appraisers what the value should be!We are there to protect the lenders from bad loans by providing them with the real value on the properties that they use as collateral for the loans they make, however the lenders took control of the process and were not concerned about protecting themselves, they were concerned about making the deal work. Thus the foreclosure mess we are in today.That being said Appraisers have a tough line to tow. Do they chance losing good lender business, the bread and butter of many appraisal companies or do they look the other way and push values as far as they can without getting into real trouble?I have to say that many appraisers at one time or another have buckled to lender and client pressure, especially when business was slow. But we are looking forward to the day when we gain control back and we will be able to really do the jobs we were trained and hired for....to provide a true opinion of value for the property in question. Only time will tell how all of this will shake out.So stay tuned as this issue will be a HOT button for a long time to come.
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