The Rocky Mountain News' John Reebock reports on the plans of Erin Toll, director of the Division of Real Estate for Colorado, to go after appraisers who inflate homes. His key graphs:
"The best way to stop mortgage fraud and our abysmal foreclosure rate is to crack down on appraisers who inflate property values," Toll said this week.
"And lenders, who trust the appraisals, are often victims, too," Toll said. "They may not know there is a scam going on."
Others, however, say that lenders often pressure appraisers to artificially inflate properties so they can justify making loans and collecting fees.
National studies indicate that predatory lending practices, which frequently involve appraisal fraud, are especially prevalent in poor minority neighborhoods.
Toll said she can yank the license of an appraiser who is found to be inflating values. There are about 5,500 licensed appraisers in Colorado.
In her first case, Toll said she knows the appraiser has inflated more than a dozen appraisals, but she's trying to figure out why.
"I don't think he is doing it for the $350 appraisal fee," Toll said.
Asked if she thought some appraisers were taking kickbacks, Toll said: "I would not be surprised. Why else would they do this?"
