Originators, this is going to be a big deal over the next few years! Appraisers are seeking an artificial mandated firewall separating loan originators and themselves. This will drastically change the way loans are manufactured.
The four biggest trade groups representing appraisers believe inflated property valuations have been one of the main driving factors behind the surge in foreclosures by financially strapped borrowers.
Led by the Appraisal Institute, the organizations also argue inflated appraisals are at the heart of most mortgage fraud schemes and have called on federal regulators to come down harder on lenders pressuring appraisers to boost values in.
In many instances, lenders don't require a "firewalls" separating loan originators from appraisers tasked with assigning a value to the property being financed.
In a 2006 poll conducted by October Research Corp., 90% of the appraisers reported having been the victims of such forms of coercion as nonpayment of fees and outright threats, with many having lost business when they opted not to go along with the plan.
Source: Baltimore Sun (04/20/07)
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