Thanks for the comments. I’ll agree that there is plenty of evidence that many banks appeared to be willing participants in many of the schemes. My comments are colored by examination of hundreds of complaints made against appraisers by banks and other institutions that now hold these loans. In most of these cases, the secondary lender was clearly duped. In more than a few of these complaints, the appraiser’s workfile included two versions of the purchase and sale agreement; the one used to buy the property and the one submitted to the loan originator. Usually the work file also included information from the multiple listing service about the subject property. In some instances the difference between the actual sales price and inflated appraisal was 67% or up to $400,000.

Keep the comments coming!

As an appraiser, I agree with most of what you say, and certainly appreciate you making an effort to be involved, but I don’t agree with the part about how the banks got “duped” by the complacent appraisers. I think it’s the other way around in reality. The banks “duped” the whole world, the regulators didn’t do their jobs, and now we’re taxing the poor to feed the rich.

Mr. Norman,

Thank you for writing about this issue. If you would like to read a very entertaining recent article about the corruption behind what goes on in the mortgage business, go to -

http://www.nichereportonline.com/reader.php

to read the Niche report, July edition. Good article about the HVCC, from perspective of a non-involved party.

Regards,
Jeniffer