Andrew Cuomo, the New York State Attorney General is probing the appraisers to find if they are the root cause of the subprime disaster. Two big Manhattan based appraisers signed statements saying they were improperly pressured by mortgage lenders and brokers. The pressure was based on them not getting any more business from that lender if they were didn't inflate the value of the property.
Why would anyone want to work with someone who wants them to act unethically? Now appraisers want to point the finger at other parties. In effect cutting a deal with the AG's office. Also in the Bloomberg article, Y. David Scharf, the attorney for Mitchell, Maxwell and Jackson (my favorite appraiser) dropped the word "lender" from his statement to focus entirely on the little guy - mortgage brokers. He emailed this statement for the Bloomberg article, "It is clear to me that the targets of the investigation are mortgage brokers along with anyone else who exerts any form of economic pressure on appraisers." He wouldn't want to upset big bad, powerful lenders would he?
I guess the next step is for mortgage brokers to point the finger at the real estate professionals, who will point the finger at their buyers, who will point the finger at the developers, who will point the finger at investors, who will point the finger at....blah, blah, blah.
Of course there a mortgage brokers AND lender loan officers AND appraisers AND real estate brokers AND the consumers themselves who have a vested interest in the rising values of real estate the past few years. To keep these people out of the real estate industry is a must. Those who engage in unethical behavior should be warned, those who commit crimes should be punished. There's no question about that.
What gets me about the statements that these two appraisers is their implied complicity while covering their asses while pointing the finger elsewhere. That's what needs to stop.
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