Hawaii Lender Trade Group Objects To Proposed Law Prohibiting Strong Arming Of Appraisers

In Hawaii, The Honoluu Advertiser reports:

• Homebuyers in Hawai'i may have been given mortgage loans based on inflated appraisals derived under pressure from lending and real estate agents. Appraiser coercion is described as part of a national problem that quietly evolved over the past decade or so and helped undermine housing markets around the country, though to a much lesser degree than fraudulent loan practices and subprime lending abuses.

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• A state regulatory agency and local appraisers testified about the industry pressure during a recent state legislative hearing on Senate Bill 2407 that intends to make it illegal for anyone with a financial stake in a real estate transaction to influence an appraiser.

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• Gayle Ishima, legislative committee chairwoman for the Mortgage Bankers Association of Hawaii, said appraisers should address the issue themselves. "It's an ethics issue for appraisers," she said. "It doesn't seem like you would need to add (a law that would punish lending and real estate agents) on top of it."

For more, see Appraisers coerced to raise valuations.