With all of the fury over mortgage foreclosures, state officials across the country are putting appraisers and their inflated appraisals under the microscope. The game of nudge nudge, wink wink between appraisers and mortgage lenders has been going on for years, but with rising housing prices and easy loan money it was largely under the radar.

However, now that the housing market has slowed down and some of the loans that were written with inflated appraisals are crashing and burning in foreclosure, the spotlight is firmly on the relationship between shifty mortgage brokers and suspect appraisers.

Now I do not want to tar and feather either profession, but there are bad apples out there. If your choice is to “play ball” or lose a big account, many people give in to the temptation. And with little fear of repercussion many appraisers fell into the trap.

However the head of the Colorado Division of Real Estate has the appraiser lender relationship firmly in her cross-hairs.

Erin Toll, director of the Colorado Division of Real Estate, told The Pueblo Chieftain in Friday’s editions her agency would formally announce the review next week. “We’re just going to be taking a much closer look at real estate activities in the southern part of the state because the mortgage fraud and the mortgage foreclosure rate is so high in Pueblo,” she said. She said her agency “is going to have a much greater presence in Pueblo” but declined to comment further. via cbs4denver.com

And Elliot Spitzer’s successor as New York State Attorney General Andrew Cuomo is also on the hunt to highlight unethical lending and appraising practices.

Attorney General Andrew Cuomo said in an interview today he has subpoenaed “many, many more’ companies. The four that have acknowledged receiving them are: Vanderbilt, New York appraiser Mitchell, Maxwell Jackson Inc., First American Corp.’s eAppraiseIT LLC and the broker Manhattan Mortgage Co. Manhattan-based Vanderbilt didn’t say what Cuomo was seeking.

“We have received the subpoena, which has been forwarded to legal counsel,’ Vanderbilt spokesman Richard Rubenstein said. “We are in the process of reviewing it.’ via Bloomberg

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