On the front lines against mortgage fraud

Mortgage fraud has made headlines locally and nationally. Some times, mortgage fraud involves identity theft or fraud — making a borrower appear to be somebody else, with a better job, more income or fewer debts. Somebody more creditworthy.

Most mortgage fraud is enabled by appraisers, who, at the request of a broker or loan officer - will lie about value and/or ignore important characteristics that influence value.  This way, these "players" close a larger loan more often and make bigger commissions. Since real estate agents also usually make a percentage of the sale as commission, sometimes they can be involved, too. Many loan officers, mortgage brokers and real estate salespeople are ethical and would never think of engaging in mortgage fraud. Mortgage fraud of this type always is enabled by a real estate appraisal report. Sometimes, certain types of fraud can be accomplished without an appraiser involved. Honest, professional appraisal reports are simply altered, or honest, professional appraisers' signatures forged. But in reality, an appraiser frequently is the person most responsible for the perpetration of mortgage fraud, because without an appraisal report, these deals would not close.

Honest appraisers are the homeowners', lenders' and the U.S. economy's best defense against mortgage fraud.

My top professional objective as an Arizona certified general real estate appraiser is to do everything I can to counter mortgage fraud. I regularly report violations to government agencies, including the FBI, the U.S. Department of the Treasury (IRS) and to the DEA.

I encourage you to participate in the efforts to halt mortgage fraud, because it is one of the most pervasive white collar crimes that the United States suffers from. Much of the subprime mess destroying our economy results from dishonest appraisers enabling mortgage fraud. I am doing all I know how to counter such disappointing behavior among people within my profession.