“Research shows that one-third to one-half of appraisals are overpriced, and the problem is endemic in Florida,” says John Taylor, president and chief executive of the Washington, D.C. based National Community Reinvestment Coalition.
“It’s like a time bomb,” says Alan Hummel, government relations chairman for the Appraisal Institute and an appraiser in Des Moines, Iowa. “There is so much out there, but we don’t find out about it until down the road when property owners start having problems.”
Lack of structure and accountability in the valuation process promotes fraud.
When you have a lending system where the appraisal process is not treated as a “sacred activity,” where the results are respected, believed and followed, then money talks and lenders find appraisers who will play the game.
It’s just that simple.