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Appraisal Fraud: no end in site??

Demos charges that federal efforts in the area have been ineffective and that recent U.S. Treasury standards calling on lenders to respect the independent judgment of appraisers do not carry the force of law. The federal government also has little control over mortgage brokers who originate the lion's share of mortgage loans.
So, why has appraisal fraud gained the foothold that it apparently has in the mortgage granting process? Is anyone watching the store? According to the Demos Report, there are a lot of people who might be or maybe even are watching, but few who have both the power and the motivation to crack down on abuses.
The states have also dropped the ball, only a few even have laws that deal with lender pressure on appraisers. Many states, in fact, do not license mortgage brokers or originators.
Appraisers, in contrast, are regulated by both state and federal agencies, but much of the regulation is concerned with appraisal standards and appraiser training. Appraisers complain that the regulations under which they operate are not at all concerned with the pressure they claim they are constantly under from lenders and real estate agents.
"According to a 2003 study by the General Accounting Office on oversight of the real estate appraisal industry, state agencies overseeing appraisers only have an average of three staff members. The report, which surveyed all states, found that "about two-thirds of the states said that they needed additional funding to conduct investigations, and over three quarters said they needed additional staff'."

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