California Real Estate Fraud Report

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Fannie Mae to Blacklist Some Appraisers

According to an article in National Mortgage News, Fannie Mae has announced that it plans to keep a “virtual blacklist” of appraisers it believes are “shady.” It is going so far as to warn banks and mortgage lenders to think twice about hiring these appraisers and if they do, the loans will be scrutinized more carefully.

Fannie Mae is a government-sponsored entity and bundles loans it purchases into mortgage-backed securities (MBS). Lack of prudent underwriting by banks during the early and mid-2000s in order to earn hefty commissions and bonuses caused huge losses to institutional investors and brought down some of those lenders, such as Washington Mutual and Countrywide.

Currently there are only four names on the blacklist and that list is available only to lenders.

While the new policy at Fannie Mae help get rid of some appraisal fraud and mortgage fraud, the other impact will be to cause many appraisers to be overly conservative. This could result in loans being rejected and escrows being canceled because the appraisal did not meet the agreed-upon purchase price.


© Copyright 2007-2018 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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