lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are

A real estate appraiser who does not adjust their numbers in favor of their lenders’ needs is considered a real estate appraiser who does not work. Mortgage loans have escalated in value with the rise in real estate prices over the last few years. The last thing that mortgage lenders want is a bad surprise during the closing process. Therefore, real estate appraisers that will not fix their numbers in favor of the lender will not get future work.

There is no way of determining exactly how much appraisers fix their numbers to meet the needs of mortgage lenders, but one can imagine that is it a lot.

It is considered fraud if an appraiser knowingly or willingly adjusts the numbers

Representatives in the mortgage industry attest that appraisal fraud is commonplace. Here is how it works. When a person approaches a lender about refinancing their home, he receives a “good faith” estimate for the loan. The value of the home is included in the estimate. This value is the minimum amount required to complete the loan process.

Real estate appraisers are then hired by mortgage lenders who need the numbers fixed. As opposed to being independent in doing their jobs, appraisers find that they are really in a situation where they work for the lender. There are other appraiser competitors to whom the lender can turn when they need to meet their requirements.

An appraisal that is estimated to be too high or too low can be frowned upon by both borrowers and lenders. For instance, let us pretend that an appraiser adjusts his numbers to show that a home with a market value of $100,000 is worth $150,000 according to the appraiser. The homeowner can then choose to pull cash out of this false equity. When it comes time to sell the property, the homeowner will only get a price that the market will pay, but will not be able to sell the property to cover the existing balance of the loan they owe on it.

From the lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are

actly how much appraisers fix their numbers to meet the needs of mortgage lenders, but one can imagine that is it a lot.

It is considered fraud if an appraiser knowingly or willingly adjusts the numbers

Representatives in the mortgage industry attest that appraisal fraud is commonplace. Here is how it works. When a person approaches a lender about refinancing their home, he receives a “good faith” estimate for the loan. The value of the home is included in the estimate. This value is the minimum amount required to complete the loan process.

Real estate appraisers are then hired by mortgage lenders who need the numbers fixed. As opposed to being independent in doing their jobs, appraisers find that they are really in a situation where they work for the lender. There are other appraiser competitors to whom the lender can turn when they need to meet their requirements.

An appraisal that is estimated to be too high or too low can be frowned upon by both borrowers and lenders. For instance, let us pretend that an appraiser adjusts his numbers to show that a home with a market value of $100,000 is worth $150,000 according to the appraiser. The homeowner can then choose to pull cash out of this false equity. When it comes time to sell the property, the homeowner will only get a price that the market will pay, but will not be able to sell the property to cover the existing balance of the loan they owe on it.

From the lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are

te. This value is the minimum amount required to complete the loan process.

Real estate appraisers are then hired by mortgage lenders who need the numbers fixed. As opposed to being independent in doing their jobs, appraisers find that they are really in a situation where they work for the lender. There are other appraiser competitors to whom the lender can turn when they need to meet their requirements.

An appraisal that is estimated to be too high or too low can be frowned upon by both borrowers and lenders. For instance, let us pretend that an appraiser adjusts his numbers to show that a home with a market value of $100,000 is worth $150,000 according to the appraiser. The homeowner can then choose to pull cash out of this false equity. When it comes time to sell the property, the homeowner will only get a price that the market will pay, but will not be able to sell the property to cover the existing balance of the loan they owe on it.

From the lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are

d upon by both borrowers and lenders. For instance, let us pretend that an appraiser adjusts his numbers to show that a home with a market value of $100,000 is worth $150,000 according to the appraiser. The homeowner can then choose to pull cash out of this false equity. When it comes time to sell the property, the homeowner will only get a price that the market will pay, but will not be able to sell the property to cover the existing balance of the loan they owe on it.

From the lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are

lender’s standpoint, they can be shafted on this deal too in case they have to foreclose on the property. In this situation, the lender may not recover all the money they lent for the property.

Reform for home appraisal

It is appraisers themselves that are leading the way for reform in their industry. They put the blame on mortgage brokers and lenders for appraisal fraud. The brokers work on commission and are also pressured to close their mortgages. Appraisers are afraid that a correction to the real estate market may worsen the existing problem.

Thus far, Congress has been able to enact changes. The real estate industry will continue to lobby for change. Until then, all that is left is to try to circumvent appraisal fraud.

Tips to avoid appraisal fraud

1. Hire your own appraiser. You need to pay for an appraisal when buying or refinancing a home anyway. It is well worth the money to know that the risk you are taking is legal.
2. Use an ethical appraiser. Since the incidence of appraisal fraud is high, this is not an easy task. Ensure that the appraiser you hire is board certified by the state.
3. Ask for references. It is better for you, the would-be homeowner, to find an appraiser who works for banks as opposed to one who works for mortgage brokers. Banks are more likely to hire ethical and competent real estate appraisers.

Many real estate appraisers are honest, ethical people. However, when they are coerced by lenders to fix the numbers, their income is threatened making it necessary for them to do what it takes to stay in business. Unfortunately for you, there are some of those appraisers who will work hand-in-hand with lenders to bring in the numbers they need to close the deal at any price. Watch out for such people and report them to the state licencing agency that issues these appraisers their licenses or report them to your local authorities.

There are lots of consumer fraud schemes out there. It is up to you, the consumer, to educate yourself to recognize what is and is not legitimate. Hopefully our advice will help you minimize becoming a victim to the crime real estate appraisal fraud.