City pushes to license property appraisers
Move comes as subprime market crashes, feds bust Milwaukee mortgage fraud operations

Aug. 20, 2007 -- City officials, in an effort to control the number of inflated or fraudulent property valuations, will push the Legislature to license property appraisers.

"We have appraisers who have engaged in -- legal, but less than ethical behavior," said Ald. Michael D'Amato, primary sponsor of the measure.

The state now does not require appraisers to be licensed or certified, according to the resolution adopted by the Common Council.

"In the event that a loan transaction was made through fraudulent, unreasonable or predatory practices, the State, Milwaukee County and the City may have little recourse," the resolution said.

Resulting foreclosures can have "a variety of adverse impacts on city government as well as the general public including lost assessed values, increased expenditures to monitor ‘board-ups,’ increased crime and increased fire risks," it said.

The council vote came as the number of foreclosures in the city is climbing amid the collapse of the subprime lending market and as federal authorities busted a mortgage fraud ring that allegedly used falsified appraisals in its $2 million scheme.

Ten people have been indicted in federal court in connection with scam transactions involving numerous properties, most of them in the central city. The indictment lists 19 separate properties involved in the scheme.

Ald. Michael Murphy, a co-sponsor of the resolution, said a similar measure was adopted by the council in 2001, when the city was plagued by large property-flipping schemes that also involved inflated appraisals and fraudulenly-obtained mortgages.

State legislation to license appraisers was drafted at that time, but was not introduced, city lobbyist Jennifer Gonda told the council's Judiciary and Legislation Committee.

"They should have passed this back in 2001 -- they wouldn't have this problem today," Murphy said.

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