Lax regulation: Inflated real estate appraisals going unchecked
WHO: State and federal regulators
WHAT: Authorities at both the state and federal level have routinely failed to investigate and resolve complaints about real estate appraisers providing false or inflated property appraisals, according to an Associated Press report.
WHY IT’S A BAD IDEA: Inflated real estate appraisals played a key role in the current mortgage crisis and in the savings and loan crisis of the 1980s financial meltdowns that have cost taxpayers millions.
WHY THEY’RE DOING IT: Sometimes, the relevant state offices are so understaffed they don’t even have an investigator. Federal officials have chosen not to act because the tools available to them would effectively halt all lending in a given state.
WHERE TO VENT: Congress enacted reforms after the last housing crisis in 1989, but failed to provide adequate funding or enforcement mechanisms.