The housing market is a mess, and I have a feeling that we'll be seeing criminal fallout from shady deals coming to light for a long time. For investigators it will be like playing real estate Whac-a-Mole -- if all the moles popped up at the same time.
One area that seems like it will be ripe with ne'er-do-wells is the real estate appraisal industry. Though I imagine most appraisers adhered to the conventions of the industry (even though I'm not sure I agree with those conventions), it seems to me that many mortgage fraud schemes wouldn't have gotten off the ground in the first place without an appraiser who would play along.
Why do I bring this up? Even with all the other shenanigans going on out there -- Citigroup
This story comes from Cuyahoga County, Ohio, and involves a scheme of falsified loan documents, a fake down payment, and an inflated appraisal. At first, it sounds like the kind of thing that could have happened anywhere across the country. But here's where the case stands out: The prosecutor said that the accused appraiser, Lavon Ivy, argued in her defense that "appraisals of homes are primarily based on opinion."
The problem here is that -- taken apart from the very clear criminal activity that Ivy, 38, of Orange Village, and her accomplices engaged in -- the suggestion that house prices are a matter of opinion probably wouldn't jump out at most people as a crazy statement. After all, what is the value of a home? Is it whatever you think it is? Is it whatever the house next door sold for? Is it whatever KB Home
After a severe housing downturn that has left millions of homeowners underwater on their purchases, maybe it's time to rethink how we value homes so that a statement that suggests prices are a matter of opinion is universally funny. But hey, that's just, like, my opinion. Let me know what you think by stopping by my blog on The Motley Fool's CAPS community.
And while you're at it, check out the opinions from some of CAPS' other bloggers. TMFBent, for example, recently took to task a defense of the government's homeowner bailout program. TMFDeej, meanwhile, talked about the "paradox of thrift." And to cap it off, dbhealy shared a video of The Daily Show's Jon Stewart taking on Rick Santelli and CNBC.