RISMEDIA, Oct. 11, 2007-Last Friday, California Gov. Arnold Schwarzenegger signed into law, SB 223. This bill is an attempt to reform the system that puts pressure on appraisers to hit a predetermined value for a property, set by the mortgage brokers or homeowners to make a sale go through.
The American Society of Appraisers (ASA) believes that lender pressure is an ongoing problem for appraisers and is committed to supporting legislation to reform fraudulent practices in the mortgage lending industry.
The new law makes it a crime in California for any interested party in a real estate deal to pressure an appraiser to appraise a property for a predetermined amount.
“The new law in California is a good first step.” said Abel Morales, an Accredited Senior Appraiser of the American Society of Appraisers. “It recognizes that appraisers are often pressured from a variety interested parties in a real estate deal and they need to have some form of protection from that.” Morales continues “The system is so flawed that many appraisers risk being blacklisted, not paid for their work, or not being hired again if their appraisals are lower than the desired number.”
The reason it so important to have an unbiased appraisal is because the appraiser is the only objective third party involved in a real estate transaction. The appraiser can perform an important role in protecting the home buyer and financial institution by giving an accurate appraisal of a property’s value without pressure from the parties involved.
“Home buyers need to protect themselves by checking the credentials of everyone involved in the transaction and requesting that their assigned appraiser be state licensed and accredited by a national professional organization,” said Michael H. Evans, a Fellow of the American Society of Appraisers who practices in Chico, Calif. “Appraisers with advanced accreditations have more to lose if they succumb to pressure than appraisers who are new to the field or who only maintain the minimum certification required by law. They also have more experience dealing with this type of pressure and are not as affected by it.”
ASA reminds consumers to hire a qualified and professionally accredited appraiser. For information about real estate appraisals, or to find an accredited appraiser near you, log on to www.appraisers.org or call 1-800-ASA-VALU.