California Real Estate Fraud Report

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05
Jan

Dodd-Frank Act Aims to Stop Appraisal Fraud

Appraisers have been swung like monkeys on a rope in the past 10 years.

When real estate prices were rising like roller-coasters, appraisers were pressured by Realtors®  and borrowers to get property appraisals at or higher than the amount of the offer. Banks like WaMu (Washington Mutual) also jumped in, especially when it came to appraisals where highly profitable subprime loans were at stake, and were later accused of threatening to blacklist appraisers who insisted on upholding the ethical mandates of their profession and refused to participate in what amounted to corporate appraisal fraud. See the article in the California Real Estate Fraud Report about WaMu and eAppraiseIt.

New York Attorney General Andrew Cuomo made a sweetheart deal with WaMu and other lenders that let them off the hook but skewered the appraisers, who don’t have the same lobbying clout that banks do with Mr. Cuomo. Appraisers were forced under his misbegotten Home Valuation Code of Conduct (HVCC) to work under third-party firms hired by the banks, supposedly to restore “independence”. The two outcomes were that these hiring firms sucked a significant amount of the appraisers’ fees, which in many cases resulted in sloppy appraisals due to the reduction in income. Thanks Mr. Cuomo, you really protected the consumer!

The Dodd-Frank Wall Street Reform and Consumer and Protection Act attempts to restore some sanity into appraising by imposing stiff fines on lenders who try to influence appraisals (appraisal fraud).
Read the full article in the Sacramento Bee.

© Copyright 2007-2017 Monique Bryher

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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