The appraisers played a crucial role in the financial crisis--both in bringing attention to the fraudulent requests from lenders and also in becoming captured by the fraud perpetrated by the lenders. (The comments about the article are worth reading also.)
Two Sentences that Explain the Crisis and How Easy it Was to Avoid
By William K. Black - New Economic Perspectives
Everyone should read and understand the implications of these two sentences from the 2011 report of the Financial Crisis Inquiry Commission (FCIC).
“From 2000 to 2007, [appraisers] ultimately delivered to Washington officials a petition; signed by 11,000 appraisers…it charged that lenders were pressuring appraisers to place artificially high prices on properties. According to the petition, lenders were ‘blacklisting honest appraisers’ and instead assigning business only to appraisers who would hit the desired price targets” (FCIC 2011: 18).
Those two sentences tell us more about the crisis’ cause, and how easy it was to prevent, than all the books published about the crisis – combined. Here are ten key implications.
Please read the rest of the article here