Mystery man3
Junior Member
- Joined
- Jul 26, 2005
- Professional Status
- Certified Residential Appraiser
If you agree send it to your representative at http://www.house.gov/
Dear US Reprensentative,
My name is (your name) and I am a FHA appraiser and wanted to alert you to the fact I have seen an increase FHA fraud recently as FHA loans become prominent. I believe this may turn into a significant loss for the United States government.
The fraud occurs as follows loan officers who have a vested interest in seeing a loan go through select the FHA appraiser who they know will bring in the value the highest and ignore problems (like a leaky roof. etc.) with the house. Although this is illegal sometimes loan officers are as flagrant as calling or emailing different appraisers until they find one that will bring in the house at the "right" value. Hence the way the system is set up right now those appraisers who cheat will receive the most work and honest appraisers will not be reused as loan officers will use the appraiser that makes their loan work.
Why this should concern you is that as the FHA makes loans, it is using the appraisals to determine how much money to loan the borrower.
For example, if a house is really worth $250,000 and cheating appraisers appraises the property for $350,000 the FHA will loan up to 97% of the appraised value which is $339,500. If the homeowner never makes a payment the loss to the United States government would be $89,500 which is the difference between what was loaned $339,500 and what the house would sell for $250,000.
Although $89,500 may not sound for a lot of money think of how many houses are out there and how many times this scam could be repeated.
The way to stop this is an appraiser selection process like what the Department of Veterans affairs has in which appraisers are randomly selected by the VA office and not the lender. In this way appraiser independence is restored.
In addition more resources should be devoted to taking unethical appraisers out of the system. Appraisal fraud I believe to be rampant and the source of most of the problems in the banking system.
If these steps are not taken I fear the United States Government may take a significant loss on these loans like many of the banks in our country are suffering at this time.
Thanks for you time,
(Your Name)
Dear US Reprensentative,
My name is (your name) and I am a FHA appraiser and wanted to alert you to the fact I have seen an increase FHA fraud recently as FHA loans become prominent. I believe this may turn into a significant loss for the United States government.
The fraud occurs as follows loan officers who have a vested interest in seeing a loan go through select the FHA appraiser who they know will bring in the value the highest and ignore problems (like a leaky roof. etc.) with the house. Although this is illegal sometimes loan officers are as flagrant as calling or emailing different appraisers until they find one that will bring in the house at the "right" value. Hence the way the system is set up right now those appraisers who cheat will receive the most work and honest appraisers will not be reused as loan officers will use the appraiser that makes their loan work.
Why this should concern you is that as the FHA makes loans, it is using the appraisals to determine how much money to loan the borrower.
For example, if a house is really worth $250,000 and cheating appraisers appraises the property for $350,000 the FHA will loan up to 97% of the appraised value which is $339,500. If the homeowner never makes a payment the loss to the United States government would be $89,500 which is the difference between what was loaned $339,500 and what the house would sell for $250,000.
Although $89,500 may not sound for a lot of money think of how many houses are out there and how many times this scam could be repeated.
The way to stop this is an appraiser selection process like what the Department of Veterans affairs has in which appraisers are randomly selected by the VA office and not the lender. In this way appraiser independence is restored.
In addition more resources should be devoted to taking unethical appraisers out of the system. Appraisal fraud I believe to be rampant and the source of most of the problems in the banking system.
If these steps are not taken I fear the United States Government may take a significant loss on these loans like many of the banks in our country are suffering at this time.
Thanks for you time,
(Your Name)
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