Industry News

Real estate appraisal laws lack teeth, funds

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

Editor's note: Bending the numbers on home valuations is often referred to as appraisal inflation, and appraisers say it's common for colleagues to do this in order to satisfy clients and stay in business. Appraisers nationwide say commission greed among their clients is feeding the corruption. In this three-part series, we examined the problem and what the industry is doing to try to stop it. (See Part 1: 'Appraisal inflation' a major real estate problem and Part 3: Two sides to appraisal technology debate.) Fraudulent real estate appraisals contributed to the savings and loan crisis of the 1980s, and legislators passed the Financial Institutions Reform, Recovery and Enforcement Act and adopted Uniform Standards of Professional Appraisal Practice to address these problems. Also, states now are more actively involved in regulating appraisers. Still, appraisers say, their industry is plagued with abuses and enforcement of rules is lacking. Some appraisers willingly bend numbers on...