Property Appraisal

Starting today, the educational requirements for California home appraisers will be tougher, but a veteran property evaluator who teaches how to spot fraud says the rules won't alter how many appraisers do their jobs. The new rules require 67% more hours of training before appraisers are certified at various levels, and define more precisely the curriculum to be used.

As home prices soared higher earlier this decade, the buying frenzy was fueled in part by what real estate industry experts now claim were exaggerated -- or outright fraudulent -- appraisals. A lawsuit filed by two couples this week adds a new twist: It claims that Los Angeles builder KB Home and a unit of lender Countrywide Financial Corp. pumped up appraisals in their Sacramento-area development to sell homes at higher prices.

The regulator who oversees national banks is protesting an agreement by Fannie Mae and Freddie Mac to buy mortgages only when lenders used outside home appraisers. John Dugan, the U.S. comptroller of the currency, said the accord that the two government-sponsored mortgage finance giants negotiated with New York Atty. Gen. Andrew Cuomo and their federal regulator was illegal, could hurt the home-loan industry and should be withdrawn.

The real estate appraisal unit of First American Corp. has been subpoenaed as part of a New York state investigation into whether mortgage brokers pressure appraisers to inflate property values. EAppraiseIT, which values up to 15,000 homes a year in New York, was asked for information about appraisals performed in the state, said Anthony Merlo Jr., president of the Poway, Calif.-based unit.

Yielding to pressure from a big mortgage lender, a Southern California-based appraisal company inflated the value of homes nationwide, encouraging consumers to pay too much for them or to borrow against equity they didn't have, a government lawsuit filed Thursday alleges. The fraud suit by New York Atty. Gen.

Washington Mutual Inc. shares tumbled 17% to a seven-year low Wednesday after the nation's largest savings and loan said mortgage losses would mount through 2008, and a probe into alleged inflated home appraisals widened. New York Atty. Gen. Andrew Cuomo said his office was examining whether Washington Mutual pressured a big title insurer to inflate home values in appraisals, making it possible for borrowers to obtain mortgages they couldn't otherwise afford.

WASHINGTON -- When an appraiser hired by your mortgage company confirms that the house you bought is worth what you paid, that's reassuring. But what if the appraiser was pressured to fudge the number? What if the house is actually worth $20,000 or $40,000 less than you paid, and you've got no equity? Does that happen very often? And what connection, if any, might inflated appraisals have with the current mess in the mortgage market? A suit filed Nov.

As Monday's deadline for payment of the first installment of property taxes looms, some Southern Californians may be wondering if they are paying too much on homes whose values have dropped. This year's downturn in the number of home sales and median prices has caused widespread second-guessing on valuations, and in Orange County, for example, has generated near-record numbers of assessment appeals.

A jury has decided that a Georgia hospital is going to have to pay about five times what it offered if it wants to condemn a rental house where a frail, 93-year-old woman has lived for 26 years. The jury said last week that Phoebe Putney Memorial Hospital would have to buy the 60-year-old brick duplex for $200,000 -- it has been appraised at $50,000 to $60,000 -- and give the tenant $51,000 to help her move.

A house erroneously valued at $400 million is being blamed for budget shortfalls and possible layoffs in municipalities and school districts in northwest Indiana. An outside user of Porter County's computer system may have accidentally changed the value of the $121,900 Valparaiso house, triggering the mess, said Sharon Lippens, director of the county's information technologies and service department.