Discussion in 'Fannie Mae, Freddie Mac, USPAP' started by Mike Kennedy, Apr 25, 2012.
Very interesting. 16% appraisal related and of that 2% and 4% value related with 12% and 14% misrepresentation.
I'm not sure I fully understand the interplay between value and misrepresenation since it would seem that misrepresenting aspects of the subject and/or sales would also lead to value issues.
With 16% of fraud on the valuation side vs. 84% on the credit side it seems appraisers are substantially more honest than the borrowers and lenders in general.
We should be proud to be the least corrupt participants in the lending process. Congratulations :clapping:
Before you jump to any conclusions regarding the honesty of appraisers versus other participants in the mortgage process you need to realize that proving appraisal fraud (except in the most extreme cases, i.e. where the appraiser invents comps that do not exist) is much more difficult than proving other types of fraud such as income and asset misrpresentation. This should be obvious since appraisals are opinions - it is pretty difficult to prove that someone infalted his or her own opinion. On the other hand, things like income, assets, employment, debts, etc. are facts. When these facts are misrepresented, there is often a paper trail that can be found to prove the misrepresentation (i.e. tax transcripts obtained from the IRS or verifications of assets from banks, credit reports can be re-pulled to see if they were altered, etc.) What most people do not realize is that one of things they sign at closing on a mortgage loan are releases that allows the mortgage lender (and their assignees) to obtain tax transcripts from the IRS, asset and employment verifications, etc. post-closing.
I am not saying that appraisers are any more or less corrupt than anyone else in the mortgage industry (as I don't know) - I am just pointing out that your conclusion based on this data may not be correct
Readers of FINCEN reports do well to understand their terminology e.g. "appraisal related" also INCLUDES tampered, revised, appraisal reports which was done by parties with vested interests in "doing the deal" who were NOT licensed Appraisers. Think: white-out, stolen Appraiser's signatures (either electronic or hand-written) etc.
Don't forget that we may have played some role in misleading about occupancy as well...there is a box for that. We may be culpable there, too.
Think also certain software that "converts". A few years ago I had some fun with a few willing participants from this forum sending me test reports, which with use of said software, ended up looking nothing like the original in less than 10 minutes. And I am in NO way a computer guru - if I could do what I did, just think what can be done with that same software in the hands of those who know their way around a keyboard better than I do - and who know how to extract a signature.
Oh wait......wasn't it charges of altered reports (some of which I personally viewed, signature and all) which resulted in the HVCC and putting the very folks in charge who admitted to cracking reports? Silly me. The wolf guards - and raids - the henhouse like never before thanks to Andy and Fannie.
AGIS Funding showed me how they altered my .PDF reports.....WE parted ways now they are gone...AND still owe me $$$$.
Why am I not surprised. I can assure you - BofA, Countrywide, Flagstar and likely Chase - have all been the recipients of altered reports - from one local MB - and I'm sure there are many, many more.
I gave what I knew about said MB to the state and they took his license - but his manager reopened shop under another name. The games go on. I have no reason to believe the modus operandi has changed one whit.