MORTGAGE FRAUD... 

Mortgage fraud has made headlines locally and nationally. Most of the time, mortgage fraud involves identity theft or fraud — making a borrower appear to be somebody else, with a better job, more income or fewer debts. Somebody more creditworthy.

Q: 'What's appraisals got to do with it?'

A: Without Honest Appraisers  doing your Reports, it has very much to do with it! Let me be up front and say that I really believe that most appraisers in the Industry are honest and they will deliver products with the highest level of integrity. However, we all know that in every field there are those exceptions.

Q: As a Lender, Real Estate Agent, Loan Officer, etc., how does less than professional appraisal reports affect my business and reputation?

A: Well, here's how; ......Some mortgage fraud involves a broker or loan officer telling the mortgagee ,the lender, and the borrower that the house is worth more than it is. This way, they can close a larger loan and make a bigger commission. Since real estate agents also usually make a percentage of the sale as commission, sometimes they can be involved. In reality, most loan officers, mortgage brokers and real estate sales-people are ethical and would never think of engaging in mortgage fraud. But mortgage fraud of this type always  originates with one of the parties who makes a commission on a closed sale.

Sometimes, fraud like this can be accomplished without an appraiser involved. Honest, professional appraisal reports are simply altered, or honest, professional appraisers' signatures forged. But in reality, a complicitous appraiser often makes it easier to perpetrate mortgage fraud. At the same time, appraisers are also homeowners', lenders' and the economy's best defense against mortgage fraud.

Q: How can I be sure that the Appraiser who is doing the Appraisal for my client is trustworthy?

A:

By design, Appraisers do not work directly for anyone; Real Estate Agents, Loan Processors, etc. If they did, there would be too much pressure to "make the deal work," rather than arrive at a professional, considered opinion of the market value of the property. Appraisers also do not work for borrowers, at least in the context of a mortgage loan. But borrowers work closely with mortgage brokers, loan officers and real estate agents, and benefit the most from a third party, objective valuation of the home they want to buy.

Like some mortgage brokers, loan officers and real estate salespeople, some appraisers are "bad apples" and will agree to go along with a scheme to defraud lenders and homebuyers so bigger commissions can be had. Not us, and not the vast majority of appraisers. Again, the appraiser is paid a set fee whether the loan closes or not, and does not work for any of the commissioned parties to the transaction. Appraisers are therefore a homeowner's, and a lender's, best front line defense against mortgage fraud.