Ken Harney commemorates this event with "Despite 2009 restrictions, mortgage and appraisal fraud spiked".
For anyone who assumed that the toughened real-estate appraisal rules imposed on the mortgage market last year would mean less monkey business in home valuations, here's a shocker: Fraudulent appraisals soared in 2009, according to a lending-industry study released this week, and they now represent the fastest-growing form of home loan fraud.My favorite parts?
Freddie Mac spokesman Brad German offered a different view. Because the MARI study made no specific reference to the rule changes by Freddie and Fannie or to the use of appraisal-management companies, "we see no connection between [the code] and appraisal fraud." Fannie Mae officials declined to comment.
Jeff Schurman, executive director of the Title/Appraisal Vendor Management Association, which represents the appraisal management industry, had no immediate comment on the findings, pending a review of the data.
Read the whole thing.
Here in the Sunshine State, Beth Kassab, a business columnist for the Orlando Sentinel, offers "Still a long way to go on appraiser reforms".
Beth also picked up on the recent MARI Report.
One year ago this week a set of sweeping reforms took effect to prevent real estate appraisers from gaming the market with inflated values at the urging of lenders and mortgage brokers.
So by now, buyers and sellers should feel sure that the appraisal system is working and won't contribute to another housing crisis, right?
I feel about as confident in the reforms as I am that I could sell my house the same day I put it on the market.
Don't take my word for it.
"It's a disaster in many respects," said Frank Gregoire, a 30-year veteran of the appraisal business and former chairman of the Florida Real Estate Appraisal Board who has been a vocal critic of the bad behavior by some appraisers.
"Borrowers find themselves paying more for an appraisal, and they have a higher likelihood that appraisal is being done by someone with less experience who will spend less time researching the market and actually preparing the report."
And what about all that fraud that was so prevalent during the bubble? There's no indication that it's let up as a result of the federal reforms.
A report released last week by the Mortgage Asset Research Institute and Lexis/Nexis said that in 2009 Florida had the highest year-to-year increase in appraisal fraud. The complaints centered on appraisers who intentionally fabricated comparable sales, ignored sales prices on similar properties or incorrectly adjusted the comparable sales of houses with slightly different features than the one being appraised.
Here's the Sentinel article.
More about the MARI Report on Rachel Dollar's Mortgage Fraud Blog.