PUBLIC TRUST BETRAYED: THE TRUTH BEHIND THE REAL ESTATE APPRAISAL INDUSTRY.
At the heart of every real estate loan transaction is the property appraisal. These appraisals are used to base underwriting decisions made by the largest banks, government sponsored entities such as Fannie Mae, Freddie Mac, FHA, and both insurance and mortgage companies. What the general public and most politicians don’t realize is that the entire appraisal industry is under siege and the appraisal is one of the only components of the loan process that is not self-serving and commission based and, in theory, keeps the players honest.
The independent appraiser is being driven out of the business by the same forces that borrowed billions from the taxpayer in the form of a bailout, speculated in an over-leveraged derivatives market, and swallowed each other up after years of mismanagement. They now control the flow of appraisal business in this country and that means they not only control the cost of the valuation but they control the quality and integrity of the report as well by their use of AMC‘s (Appraisal Management Companies) that they either own or have an interest in.
Why should anybody care? Because the housing recovery is dependent on transparency that we have not seen in a decade or longer. Pension funds and municipalities purchase mortgage-back securities that should be based on objective valuations prepared by professionals and not entry level appraisers that will work for little more than minimum wage or be influenced by the promise of more business or threatened by no more further business.
What this book emphasizes is that there MUST be transparency and objectivity in the mortgage and evaluation process and if we are to solve the current credit crisis and what we must change in the financial industry. As a result of fraud, conflicts of interest, over-valuations, and lax underwriting standards, the entire lending industry must be examined and changed if any meaningful housing recovery is to be accomplished.
Buy the book: http://www.amazon.com/Public-Trust-Betrayed-Appraisal-Industry/dp/1617393673/ref=tmm_pap_title_0?ie=UTF8&qid=1405882809&sr=8-1
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