Foreclosures Have Pushed Out Of Business The Shenanigans

Posted on August 28, 2008
Filed Under Repo Homes |

Could it be true that the foreclosure crisis has pushed out of business the shenanigans – the appraisers and mortgage loan personnel that used to work hand in hand to dupe the borrowers during the housing boom years? Or despite the federal strictures the breed is slinking back wearing another mask?

Any appraiser will cheekily reply that for them business is brisk as usual. It is common practice to inflate value of houses. It is just that the techniques have become subtler. Bill Garber director of Appraisal Institute, comments that the appraisers are pressurized to reach the numbers required to put through a sale. Recent housing legislation, reacting to the unprecedented foreclosure crisis, has laid down strict rules about undue interference, intimidation and bribing. But the game continues.

Foreclosure crisis or not work, goes on as usual. October Research Corporation conducted a survey about two years ago. According to its findings 90% of those that they interviewed said that interference or intimidation by loan officers and brokers is rampant albeit under wraps.

Gary Crabtree of Affiliated Appraisers in Bakersfield commented that the menace has not gone. In fact there are some indications and developments that despite the foreclosure related warnings, things could get worse. A new foreclosure relief programme has been kicked off that will expect lenders to bring down the value of repo house to 90% of the current market value so that borrowers can refinance. This will put pressure on the appraisers to inflate the value to cut down the losses of the lenders. Sara F. Schwarzentraub of Inter-State Appraisal Service in California recalls the incident of one client leaving a recorded message complaining that if she did not know that she could not hit then why did she take the assignment!The intention of this pressure is to find out whether the fellow will play ball, comments Frank Gregoire who was a past chairperson of Florida Real Estate Appraisal Board. As yesterday, today also appraisers are regularly getting provocative e-mails and phone messages from the lenders and brokers to bend to their purposes. One of the reasons for this attitude is that the foreclosure crisis has made the atmosphere tough for survival. Sales are down and the lenders know that if appraiser A does not co-operate appraiser B or C will. A new comer in the appraising world, badly needing an assignment will gladly comply.