Well, that's just, like, your opinion man
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 stuck with the conventions of the industry (even though I'm not sure I agree with those conventions), many mortgage fraud schemes wouldn't have gotten off the ground in the first place without an appraiser that would play along.
Why do I bring this up? Even with all the other shenanigans going on out there -- Citigroup, Bank of America, John Thain, Bernie Madoff -- the story of this convicted appraiser jumped out at me.
This story comes from Cuyahoga County, Ohio and involves a scheme of falsified loan documents, a fake down payment, and an inflated appraisal. To read the details of it, it sounds like the kind of thing that could have happened across the country. But here's where the case stands out -- the prosecutor on the case 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 and her accomplices took part 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 what someone is willing to buy it for? Is it whatever the house next door sold for? Or is defined by some other factor like how much you could rent it for?
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. What does everyone else think?