Homeowners find they owe more than house is worth when switching adjustable rates to fixed mortgages
As the housing market cools, Americans are confronting a pr oblem that was easy to ignore during the boom: Inflated appraisals of home values.
Critics inside and outside the appraisal business have long warned that many appraisals are unrealistically high. That's partly because generous appraisals help loan officers and mortgage brokers, who often choose the appraiser, complete more deals. If a home is appraised at less than the buyer offered, the deal is likely to fall through.
Inflated appraisals didn't matter much when home prices were rising at double-digit rates, since market values would quickly catch up. Now, however, prices are leveling off in many places and falling in some. Some homeowners are finding that the market value is below what past appraisals led them to believe. READ MORE . . .
Link: ContraCostaTimes.com | 07/31/2006 | Inflated appraisals bungle refinancing.
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