Appraisals are becoming one of the biggest obstacles for those trying to sell their homes, refinance their mortgage or tap into any credit line (if there is any equity).

During the housing boom, appraisers were swamped and had increased pressure to inflate home values in order for the borrower to get a loan, now it looks as if the pendulum has swung too far the other way.

The bigger problem however, is in the refinancing of existing loans. If an appraisal comes in too low it could promote the lender to turn down the loan, as the lender does not want to be burned with lower property values.

To me there needs to be a compromise. If there isn’t one, foreclosures will continue, even for those with good credit and income, but no equity due to a low appraisal.

This entry was posted on Friday, July 3rd, 2009 at 12:50 am and is filed under Investing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.