Who fell asleep at the wheel regarding over-inflated real estate appraisals? Bank and lenders control the appraisal process using 'preferred' vendors (wink wink). FIRREA and AVM's are a joke! Many local appraisers went out of business because 'AVM's' cleared out anyone that would challenge over-valued loan amounts. Lenders are driving the bus on property valuation and that should change immediately!

Regulation created under FIRREA does more to help lenders loan money and nothing to protect borrowers. Every time a home 'flipped' it served as a basis for a new 'comp' and the process repeated itself. Home prices were propped up like a house of cards.

Just like a bank that leaves the vault open, lenders are 'surprised' that values are inflated. What rational person or entity lends without knowing the collateral's real value? Lenders do business exactly this way. Congress needs a wake-up call! TA WEBSTER

-below referenced from "The Fraud of Appraisal Regulation" by Larry Levy 2004.

Appraisal regulation assists in pushing up the money supply (by way of helping to increase the value of collateral), economic activity (via higher and higher loan amounts in cash out refinancings), and lender profits. As such, regulation is little more than a ruse designed to shift financial liability for losses from the appraisal client (i.e., the lending industry) to the Federal government who is now responsible for appraisal oversight.

Now that we're looking at another serious financial "adjustment" just like the S&L Crisis, lenders and GSEs will be able to point to Federally mandated 'appraisal regulation' as their free pass to escape a Congressional inquisition (where property valuations may be called into question). They will have the appearance of having done everything by 'the book'. The investor groups suffering damages from having purchased loan packages (with this designer gift wrap) will have to seek a bail out from the government - the ultimate underwriter and overseer of lending and appraisal regulation. Naturally, the government will not accept blame, but it will look for a villain. Guess whom they will find?