Appraisal Process Under Fire!

Last week New York's attorney general filed a lawsuit against a larger appraisal management firm for allegedly giving in to pressure from a major lender to manipulate their appraisals for the benefit of the lender. The attorney general wasn't able to file suit against the lender because they fall under federal law. It will be interesting to see if the lender will finds itself in hot water. This brings up an issue that a survey released earlier this year highlighted. The survey done by October Research Corporation and Forsythe Appraisals, LLC had responses from 1200 appraisers nationwide. 90% of the respondents indicated they felt "uncomfortable pressure" to adjust appraisal values. In 2003 the survey indicated that 55% of the respondents felt that way. That is a very substantial increase and has certainly added insult to injury with respects to the foreclosure and distressed sale market. This lawsuit in New York will be interesting to watch and see if other lenders or appraisal firms are hit with similar suits. In Santa Barbara I would like to think that we have been honest in our dealings here in Santa Barbara, but I would like to hear from anyone that might have some insight in to this. See You In Escrow!