The uncomfortable relationship between mortgage lenders and appraisers is starting to come out into the open. For years we have seen mortgage companies pressure appraisers to provide numbers that they can work with, or else lose the business.
It has put the appraisers in an awkward position, feed the family or maintain their ethics. Well, one real estate appraiser in California is fighting back. She is suing Washington Mutual over their taking away her business after she refused to rework appraisals to hit the numbers. Jeniffer Wertz is suing WAMU for breach of contract, fraud, slander, amongst other causes.
And good for her. Appraisers need to be independent as they have the duty to properly assess the market. If appraisals are suspect then the market becomes very inconsistent and home buyers and sellers get hurt. With the huge influx of money over the past few years appraisers felt the pressure to meet the numbers or else lose the business.
And that is a tough way to earn a living.
California appraiser Jeniffer Wertz earned more than $100,000 a year doing two or three appraisals a day for Washington Mutual until May, when she refused to revise reports to falsely indicate market conditions were stable, according to a complaint filed Jan. 10 in California state court in Sacramento.
A bank sales manager “insisted” Wertz “change her appraisal to indicate ‘stable’ market conditions so the loan could be approved,” she said in the complaint. If Wertz didn’t, she claimed, the sales manager said she would be “prevented from doing any WaMu appraisal work.”
The independence of appraisers has been raised as a potential factor in the subprime mortgage crisis. In November, New York Attorney General Andrew Cuomo sued First American Corp., the largest U.S. title insurer, for allegedly inflating home values under pressure from Seattle-based Washington Mutual. Via Seattle PI
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{ 5 comments… read them below or add one }
Don’t stick up for appraisers. Appraisers tend to be the least reasonable people in the real estate industry and it’s because they are independant. As a real estate agent, appraisers call me to ask my opinion on the value of property all the time and then when I get a poor appraisal back, they refuse to look at my evidence that supports a higher appraisal. The true measure of value in the the market place is a willing seller and a willing buyer. I can’t tell you how many times an appraiser has been a deal breaker on a property that had multiple offers and was under contract within hours of listing because they didn’t feel it was worth the contract price. Multiple offers within minutes of listing show a huge demand for a property and should translate to a greater price. Appraisers tend not to use that common sense.
Grouping all appraisers together and saying they do not use common sense is just ignorant Chris. Do you even know what you are talking about? Would you believe that there are MANY appraisers who appraise properties correctly and HONESTLY and are pressured by people like you to use “Their Comparables because they are better”. You don’t even know what you are talking about. Maybe it’s time you find yourself a good appraiser and get rid of the one you have. And…do me a favor and stop grouping appraisers into one bowl…..I am sure there are plenty of RE Agents that are decent people unlike yourself. I would never group them with you.
I don't know where you live and work. But as far as I am concerned you and 95% of realestate agents are just one step above or below car salesmen. Oh by the way I would never ask an agent for any valuation on any property. Why waste my time.
Appraisers are independant for a reason – and that reason is to protect the public trust with honest, ethical appraisals, based on competive sales and market knowledge and history. While willing buyers and sellers may establish an agreed upon price, that does not necessarily mean that the home is worth that price. It is the appraisers job to value a property honestly, with no bias. Good Realtors do not overprice their listings, nor do they pressure appraisers to commit fraud. I would NEVER ask a Realtor what they thought a value should be – but if it is a sale, and it is coming in short, I will give them the courtesy of asking them to provide any sales I may have overlooked. I’ve yet to find a Realtor who could provide anything I hadn’t already looked at. Your client is not my client, and my client needs to know the truth – not your wishes.
I don't know about someone who does three appraisals a day. Would all the appraisals be of similar home in the same neighborhood using the same comps? I would like work like that.