Appraisals are often times viewed as 'necessary evils' or another annoying procedural step in the loan transaction.  However, appraisals are typicaly the least expensive part of the process assigning their author's the greatest risk.  The appraiser merely reports the observed and researched findings, and if ethical, does not have any interest in the outcome.  Ethical appraisers who report negative findings do not normally find some demented satisfaction in doing so.  Appraisers are not normally clarvoyiant; they do not know what the property will look like prior to inspection.  It is also not normally the appraiser who has created the issue at hand.  However, by turning the other way and inflating appraisals, it is the local and national economy which will suffer.  As interest rates rise, the problem of over-valued homes could harm the market.  After all, for many people their home is their biggest asset.  And as the refinance market continues to slow - and many unethical lenders market to past clients their prior dishonesty may restrain their ability to refinance said clients --- you can only push a home so many times 

Appraisals are often used in Interstate Commerce Banking and are therefore subject to Federal Laws.  The minimum standards when selecting an appraiser as set forth by the FDIC call for the individual to have neither a 'direct nor indirect, interest, financial or otherwise, in the property or transaction.'  Almost everyone in our industry is familiar with the recent settlement by Ameriquest Mortgage for $325 million.  Of the top three complaints held in the lawsuit; over-inflated appraisals was number one.  Property flipping, mortgage fraud, preditory lending accomplished with the help of over-inflated appraisals can and have landed appraisers in jail.

Large lenders can get stuck holding mortgages several times the actual worth of the property.  Properties appraised as if renovations have already been completed have indicted appraisers once discovered said renovations were never completed.  Homes purchased for $19,000 have been resold the same day for $112,000 (the appraised value).  Appraisers do not create value, they report it.  And you never know where your paperwork will wind up. 

https://www.mortgagefraudblog.com

https://www.fbi.gov  type in "quick flip" under search for information on Operation Quick Flip

-Tip for unethical appraisers who we review

            If you are going to make things up, please make it sound more interesting!