Glenn Roberts Jr. reports that appraisers across the nation say commission greed among their clients is feeding the corruption.
About 55 percent of the appraisers who participated in a national survey reported that they felt pressured to inflate home values in appraisals, according to October Research Corp., which provides information and analyses for the real estate settlement services industry. A group of 500 fee appraisers, who each have at least five years of experience in the field, participated in the survey, which was released last year.
Some appraisers willingly bend numbers on home valuations to satisfy their clients and get more work, a practice known as "appraisal inflation." In its most destructive form, appraisal inflation can assist predatory lending practices and can play a role in flipping schemes, in which properties are fraudulently assessed to win a high loan amount and then resold for even higher prices. Exaggerated appraisals can lead to inflated home prices, increasing the risk of loan default and foreclosure and placing homes out of reach for some prospective buyers.