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April 19, 2005
Paper: Home Insecurity
After reading Mike Davis's article on the housing bubble this morning, here is an even more thorough survey of property value inflation, but this time based on corruption within the appraisals market. What a cold shower, to borrow against your property value only to learn that you can't sell your house for the amount of your mortgage (even without a downturn in the market).
Predatory lending targeting minority and sub-prime borrowers often involves appraisal fraud. Low-income aspiring homeowners are also targeted by developers who collude with dishonest appraisers in the aggressive marketing of new homes offered at inflated prices.
Home Insecurity: How Widespread Appraisal Fraud Puts Homeowners at Risk