Tagged: appraisal fraud

Appraiser Engaged in Mortgage Fraud Remains Licensed with California BREA 15

Appraiser Engaged in Mortgage Fraud Remains Licensed with BREA

The Inmates Must Be In Charge of This Asylum The California Bureau of Real Estate Appraisers is sadly yet another example of a state agency that does not really understand what the taxpayers expect of it. The taxpayers probably assume the agency in charge of licensing appraisers in California would certainly not renew the license of an appraiser who not only is indicted in a multiparty, multi-million dollar mortgage fraud case, but actually pled guilty to at least one count of the crime. Unfortunately, that assumption would be incorrect. The following is a summary of the case in question. We...

Court of Appeal New Ruling on Appraisal Fraud 1

Court of Appeal New Ruling on Appraisal Fraud

New Ruling on Appraisal Fraud by California Court of Appeal On May 23, 2014, the Court of Appeal for the Fourth Appellate District, Division One, State of California, issued a very interesting decision on whether a plaintiff can successfully plead and argue fraud based on comments made about the concluded value of real estate that was appraised. The case is Graham V. Bank of America, N.A., et al. Although this ruling is unquestionably useful for an appraiser being accused of appraisal fraud, it probably is not the magic elixir many will proclaim it to be. This is because the appraiser...

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Mortgage Fraud – Trends and Schemes

In last month’s edition of the AppraisalPort newsletter, I covered some of the appraisal guidelines that were discussed at the National AI Connect Conference in Indianapolis, July 23-25, 2013. This month, I want to discuss another session that dealt with mortgage fraud. I learned a lot about how people are trying to get rich through fraud in this very interesting breakout session. The session, “Residential Mortgage Fraud Enforcement: Trends and Identifying Schemes,” included presentations from Housing and Urban Development’s (HUD) Special Agent Eric Mascari, Interthinx’s Ann Fulmer, and Gary Crabtree, SRA, owner of Affiliated Appraisers. The session focused on the...

Why are Appraisers Furious at Fraud by their Peers while Corporate Lawyers are Complacent? 1

Why are Appraisers Furious at Fraud by their Peers while Corporate Lawyers are Complacent?

I have done a series of articles about the efforts of honest appraisers (which began in 2000) and loan brokers to alert the lenders, the markets, and the government to the twin fraud epidemics (appraisals and “liar’s” loans) committed by lenders’ controlling officers that drove the financial crisis. Honest appraisers could have profited greatly by becoming dishonest appraisers who would be given the lucrative assignments by fraudulent lenders’ controlling officers and their agents. Instead, honest appraisers suffered serious losses of income because they refused to succumb to the extortion efforts of the fraudulent lenders and their agents. A national survey of appraisers...

Proposed Amendments to the Sentencing Guidelines in Mortgage Fraud Cases 2

Appraisal Fraud – Stay Vigilant

Remaining Vigilant Against Appraisal Fraud While recent studies show that appraisal fraud is on the decline, the nation’s largest professional association of real estate appraisers still cautions lenders and other real estate industry professionals to be on the lookout for suspicious activity. According to CoreLogic’s Second Quarter Mortgage Fraud Report, the risk of mortgage fraud decreased during the second quarter with valuation fraud showing the biggest improvement, falling 7.1 percent between the first and second quarters of the year. However, fraud has escalated in cases where potential borrowers attempt to deceive lenders about their incomes. The report showed that an...

Real Estate Appraisers Warned us About the Crisis but We didn't Listen 2

Real Estate Appraisers Warned us About the Crisis but we Didn’t Listen

Federal actors could have responded to the appraisers’ warning and prevented the crisis On July 9, 2013 I participated in a radio interview with a lobbyist for the 100 largest financial firms.  The San Francisco radio program host asked me what question I would ask the lobbyist and I said that any discussion should begin with allowing him to state his view of what caused the crisis.  In the course of his explanation, he bemoaned the fact that there was no warning about the crisis. I found this ironic because I had just published that morning an article about how...

NAIHP Promotes New Appraisal Rules on Capitol Hill 4

NAIHP Promotes New Appraisal Rules on Capitol Hill

NAIHP acknowledges neither HVCC nor Appraiser Independence rules require the use of AMC’s. The conflict of interest rules contained in the “Interim Final Rule on Appraiser Independence,” were designed to establish a firewall between a loan production department ordering valuations of residential real estate and appraisers, who perform valuations. The Federal Reserve Board (FRB), who established the Interim Final Rule to replace the Home Valuation Code of Conduct (HVCC) in October of 2010, recognized it was not always practical to separate these functions in small financial institutions, which is why the FRB created two sets of firewall requirements: one for...

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Home Appraisers Complain that New Regulations Hurt the Housing Market

On June 28, 2012 appraisers, appraisal organizations, and others testified before the US House of Representatives, Committee on Financial Services, Subcommittee on Insurance, Housing and Community Opportunity, on proposals to improve oversight, regulation, and enforcement of the housing appraisal process. Among the topics addressed were the implementation of new financial service regulations under the Dodd-Frank law, appraisal fraud, the role of state regulators, and oversight of the appraisal process at the local level. The topic of the hearing was Appraisal Oversight: The Regulatory Impact on Consumers and Businesses. You will can read the testimony by clicking on the following link....

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Statement of Donald Rodgers (AARO) Before Appraisal Oversight Hearing

My testimony today will focus on issues that are particularly relevant to state regulatory officials. Challenges Facing State Appraisal Boards Enforcement States established appraiser licensing and certification programs as a result of the Financial Institution Reform, Recovery and Enforcement Act (FIRREA) of 1989. These agencies issue appraiser licenses and certifications to those individuals who possess the education and experience requirements promulgated by the Appraiser Qualifications Board of The Appraisal Foundation. The agencies also oversee compliance by appraisers with the Uniform Standards of Professional Appraisal Practice (USPAP), state law and agency rules. These programs have been set up in a variety...

HVCC & Interim Rules Unintended Consequences 7

NAIHP Letter Regarding Appraiser Independence Regulations

An outline exposing the unintended consequences created by HVCC and the Interim Rule February 23, 2012, Hon. Richard Cordray, Director, Consumer Financial Protection Bureau Re: Appraiser Independence Regulations Dear Director Cordray: Thank you for taking the time to meet with NAIHP on January 26, 2012. We always appreciate the opportunity to meet with the CFPB and discuss issues of concern that affect consumers and small business housing professionals. Although, our meeting covered a broad range of issues, my comments today are limited to the ongoing problems associated with “Appraiser Independence.” Today’s interim Rule on Appraiser Independence, was built on the...

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