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Home appraisal frauds
By | February 1, 2008
Very often the crooked and the unscrupulous have a way of influencing the just and making them go the wrong way. That is exactly what is happening to appraisers who are being pressurized by crooked lenders and realtors who are desperate to close a deal and are willing to go to any lengths.
There is a credit bubble which has formed and though money is easy to come by, there are also rising rates of frauds and people being duped. A home appraisal fraud is a continuing problem that is affecting home owners to a large extent.
In such a fraud the appraisal of a home is done incorrectly and a house is over valued. Since the house has been estimated to be more valuable than it actually is, home owners end up borrowing more than the value of their homes. Thus owners of homes are not able to sell their properties at the price it was appraised at and instead have to settle for less. This happens even if there is no downturn in the real estate market.
Apparently almost 50% of appraisers have reportedly been pressurized by loan sharks and mortgage agents to appraise a house incorrectly. Appraisers who do not comply do not get paid for their work at all.
Predatory lending is one such thing that contributes highly to the appraisal fraud. Problems are further compounded when home owners reduce their home equity to meet other expenses and in the end many are incapable of owning their own house.
There need to be new rules that ensure that an appraiser works independently of a mortgage lender or a real estate agent. The government should also look into the reasons behind the home appraisal fraud and tough sanctions should be imposed on those who flout rules. This will ensure a more healthy real estate market.
Topics: Real Estate Agents |
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