When you hear the term “fraud,” it's natural to get a bit nervous.
After all, mortgage appraisal fraud is no joke and unfortunately occurs more often than you might be led to believe. Knowledge is power when is coming to avoiding the pitfalls of appraisal fraud and understanding how to spot it when it happens.
What is Mortgage Appraisal Fraud?
In short, mortgage appraisal fraud occurs when a home is intentionally given an appraisal value that's well above its appropriate market value.
Why Does Appraisal Fraud Occur?
The reasons why such fraud occurs varies from case to case, but more likely than not the appraiser is simply attempting to aid home-sellers in netting more than market value for their homes. On the flip side, fraud can work to benefit those looking to score a better deal while buying and refinancing homes.
Sometimes fraud occurs unintentionally on behalf of inexperienced appraisers who think that they're doing a favor for first time home-buyers or clients with poor credit.
Unfortunately, such practices can land them in hot water and cost them their reputation and business for the long-term. For this reason alone, it's so important to work with a trusted appraiser when it comes to your property dealings.
Who Commits Appraisal Fraud?
Appraisal fraud can be a two-way street in regard to who's doing the wheeling and dealing. Oftentimes, appraisers are the ones pulling the strings in pursuit of an inflated value for sellers. However, homeowners and sellers alike can also doctor documents digitally to artificially inflate or deflate the value of a property.
Therefore it's crucial that those looking to buy or sell their homes not only trust their appraiser, but also understand how to fight potential fraud themselves.
How to Stop Mortgage Appraisal Fraud
Fighting fraud is easier said than done; however, there are actionable steps you can take to avoid falling victim to fraud and spot it before it happens.
· Ask questions – If something doesn't seem right regarding an appraisal, such as a particular property exemption of classification, ask your appraiser about the specifics.
· Be vigilant – Likewise, pay close attention to every step of the process whether you're buying or selling a home, especially when it comes to monetary values on any given document.
· Hire an experienced appraiser – The best line of defense between you and an appraisal snafu is hiring someone with experienced in the field who understands regulations in and out and can spot suspicious activity at the hands of others.
If you suspect that you may be the victim of appraisal fraud or have any further questions regarding your mortgage appraisal, feel free to reach out to us to see how we can help.