A recent article in the Wall Street Journal “Dodgy Home Appraisals Make a Comeback” expressed concern over a growing occurrence of appraisals with inflated values.
Digital Risk found that some appraised values were off the mark based on discrepancies that appeared unintentional, though, “at other times, the appraiser’s selection of [comparable properties]…is very hard to justify,” said Thomas Showalter, chief analytics officer at Digital Risk.
Falling mortgage volume is bringing out some of the bad practices that dominated the prior housing boom and makes the need for qualified and experienced appraisers essential – something that an organization like RAC is built with.
One of our members with extensive appraisal experience was able to thwart the pressure because he understood the local market, something not emphasized by lenders today as in year’s past.
Tom Allen, who says he has been an appraiser for 44 years, recalled appraising a house in April for about $450,000 for a loan application with J.P. Morgan Chase & Co. About a week later, Mr. Allen, 68 years old, says he received a request from the appraisal-management company to use two different properties as comparables that had recently sold for around $525,000 and $540,000. Mr. Allen says he refused because the homes were larger, in a more expensive neighborhood and built about 10 years after the property in question.