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Developers Pressed Appraisers For Higher Values During Boom

Reporters at the Land Use Accountability Project have uncovered evidence that home appraisers were under great pressure at the height of the bubble to inflate home values.
April 14, 2009, 2pm PDT | Tim Halbur
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"The Center also found many appraisers who say they bowed to lender pressure to 'hit the numbers' in order to remain in business. These appraisers, along with the lenders who pressured them, helped pump air into the housing bubble that led to widespread economic devastation, according to dozens of appraisers, lenders, and others with intimate knowledge of home loan practices.

And there's evidence that Fannie Mae and Freddie Mac, the two largest purchasers of home loans, bought mortgages without ensuring they were made with accurate appraisals, according to an investigation by New York Attorney General Andrew Cuomo.

No one knows exactly how much of a role inflated appraisals played in the mortgage meltdown. But as an increasing number of homeowners face foreclosure, many remain unaware that the appraisal they paid for during the purchase process may not have reflected the true value of their investment, and may have allowed them to borrow more money than their home was worth."

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Published on Tuesday, April 14, 2009 in Land Use Accountability Project
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