Real Estate Valuations by Banks and Appraisers questionable.

Here is a question about what has happened with the banking system.

Does the fact that banks have done well in the past make it

ok to have pillage the taxpayer, deceive share holders, make massive misses on forecasting, accept of fraudulent appraisal values all ok too because they were profitable before and will likely be profitable later? If we all except this premise we will always be on a roller coaster ride. The large banks failed massively by taking millions and even billions of dollars worth of loans on over valued property from appraisers that were in bed with the bank. There was absolutely no way to support such a rapid increase in prices in the standard appraisal process without some manipulation. I don't see how most appraisals during 2005-2007 could be considered fraudulent. There are 3 valuation methods given on a standard appraisal: Comp sales, income capitalization rate, cost approach (similar to replacement cost used by insurance companies-typically will not give a usable market value price). How could prices jump 30% in one year if an appraisal was done properly? Residential real estate is typically appraised by weighting the sales comparison approach most heavily. In theory a property is worth what someone is willing to pay for it at that time. There is no chart, or diagram or formula that can tell you the exact value of a property. However, if appraisals use comparable home sales it seems to be an extreme stretch for a house to be priced 15 % -30% more in most cities in America on year over year basis.