by Calculated Risk on 10/03/2007 01:23:00 PM

From the San Jose Mercury News: Home appraisers pushed to inflate values

Pushed to exaggerate home values during Silicon Valley's real estate run-up, appraisers say agents and homeowners are now pressuring them to prop up those values as prices decline.

People "are trying to refinance to get their butts out of trouble, and the values aren't there," said Mike Terry of MK Terry Appraisals, who appraises homes in San Mateo County.

... Many appraisers say they routinely feel some pressure to inflate home values. A national industry survey shows that the number reporting such pressure has grown by more than half over the past four years.
...
"Exaggerated appraisals are not the entire reason these agencies and financial institutions are in financial distress, but they are a piece of the puzzle," said John Brenan, director of research and technical issues for the Appraisal Foundation.

..."What a lot of them do is what I call dialing for dollars," said Jim Manning, a semiretired appraiser with 32 years in the business who lives in Half Moon Bay. "They get on the phone and start dialing appraisers, asking, 'Who can come up with this value,' and 'We don't want it if you can't.'