A high appraisal can at first seem to be a homeowner’s best friend. After all, the higher the property’s apparent value, the more one can get on a cash-out mortgage refinancing or a home-equity loan.

But problems arise when the appraisal is higher than the home’s actual value. Such overvaluation can lead homeowners to borrow too much. And later, when they resell, they could learn that the till they thought was full of money contains much less – or nothing at all.

What’s behind appraisal inflation? One of the more insidious factors is the pressure coming from mortgage brokers and bank loan officers. Because their commissions are based on the size of the loan, which is pegged to the value of the house used as collateral, they have a direct interest in seeing properties receive the highest possible valuation. If an appraiser brings in a lower value than the agreed-upon sales price, lenders may refuse to provide a mortgage big enough. The buyer then has to come up with more cash or renegotiate. If he can’t, the deal falls apart.

There are no data to say how serious or widespread appraisal inflation might be, but it’s definitely going around, says Don Kelly, vice president of public affairs for the Appraisal Institute, which represents 18,000 appraisers. In a 2004 survey by the Appraisal Foundation, a nonprofit standard-setting organization, 62 percent of the 6,500 appraiser respondents said they had lost work for failing to meet a prescribed value. The complaint of pressure has become so common, in fact, that federal bank regulators in May warned the nation’s lenders against interfering in the independence of the appraisal process.

But lenders aren’t the only ones lining their pockets through inflated appraisals. The practice also is frequently employed in criminal mortgage fraud and “flipping” schemes, which aim at ripping off financial institutions. In such cases, appraisers conspire with other parties, often mortgage brokers and developers, to pump up values on houses that are then bought and resold several times by the insiders and dumped on unsuspecting buyers. The houses often end up in foreclosure. Banks lose money and legitimate buyers suffer because they overpay and can’t sell or refinance. Communities deteriorate when the frauds collapse, leaving abandoned homes and depressed property values.

The FBI earlier this year reported that mortgage fraud cases had risen fourfold from 2001 to 2004, with more than 17,000 incidents of suspicious activity in 2004. In the second quarter of 2005, the bureau had 642 cases pending – more than five times as many as in 2001.

You can help protect yourself against appraisal inflation by researching prevailing property values before you buy, sell or refinance. Review recent sales and/or assessment records, which are available from your real estate agent or your local government. Also, ask your lender for its appraisal. If you have doubts about its accuracy – say, the houses it compares to yours are from another school district – you can hire your own appraiser, though your lender may not accept his valuation.

To find an appraiser who is accredited and licensed, try the Appraisal Institute at www.appraisalinstitute.org or the National Association of Independent Fee Appraisers at www.naifa.com. Generally, the fee ranges from $350 to $600.

While it’s no substitute for one by a licensed professional, you can get a quickie online valuation that will give you a sense of the current market value of houses in your area. Web sites offering estimated house prices are run by real estate companies (they’ll provide your lead to local brokers) and use data drawn from Multiple Listing Services sales records and public records. Two to try are www.housevalues.com and www.homegain.com.