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Description
What's the easiest way for an unethical mortgage broker to get an appraiser to do what the broker wants?
* Browbeat the appraiser?
* Promise future work?
* Threaten to withhold payment?
* Bribe the appraiser?
Actually, the answer is none of the above. The easiest way for an unethical mortgage broker to get the appraiser to do what the broker wants is to become the appraiser.
Regrettably, the "do-it-yourself" appraisal seems to be the tactic some mortgage originators are using these days. In a recent case in Florida, an employee of a mortgage company admitted to forging signatures on counterfeit appraisal reports to help defraud a New Jersey lender on 30 properties.
In another case, "Gary," an appraiser in Indiana, received a request to appraise a property for a mortgage broker. After a few assignments, Gary heard nothing more from the broker and didn't think much of it. About two years later, Gary received a call from the FBI and a letter from his state appraisers' board. The broker and her two sons were involved in an illegal flipping scheme. Using a forms software program, they scanned in Gary's signature from one of the appraisal reports he had legitimately completed for them and began producing fraudulent appraisal reports. The FBI and the state board assumed the reports were Gary's. After extensive effort, Gary was able to convince the FBI agent that the appraisals involved in the illegal transactions were not his. The most compelling issue in his favor was that he used forms software from a vendor where the signature file must be obtained directly from the vendor. The fraudulent reports used a different brand of software that allowed anyone to scan in a signature and create the signature file.
During the time it took to straighten out everything with the FBI and the state board, Gary was placed on every major lender's exclusionary list and lost his entire clientele. Unable to obtain appraisal assignments, he dropped his professional designation from the Appraisal Institute and let his appraisal license expire. Gary now drives a truck for a living.
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