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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (63504)	6/13/2006 7:37:47 AM
From: redfrecknj	Read Replies (1) \| Respond to of 110194

Florida "A woman with little income and meager assets buys 10 properties worth more than $1.8-million — and doesn't have to put a dollar down." sptimes.com Illinois Apparently, you don’t need to have appraiser credentials of any kind in Illinois, nor can you even be prosecuted for practising without a license or committing fraud. Appraisals Part of All Fraud Loans by Lew Sichelman “…Emblematic of the scope of the mortgage fraud problem throughout the country is what’s going on in Illinois, where three out of ten appraisals are found to be forged, according to Robert Gorman, an East Hazel Crest, Ill., appraiser. “That’s a significant number,” he told the meeting. “And that’s only the ones we know of. Who knows what we don’t know?” Gorman said in some cases, appraisers who have had their licenses lifted continue to make valuations using someone else’s identification. They swipe the names from class rosters, loan files, and even industry websites, he said. In other instances, he also said, the “appraisers” were never licensed at all, and are part of a larger scheme to fleece lenders. Gorman told of one crew of 13 fake appraisers who are working out of a factory on Chicago’s South side. The authorities would like to shut down this appraisal factory, he said, but they can’t. “They’re not licensed, so there’s nothing we can do,” he said. “So they are still there.” Nevada Mortgage fraud hits close to home in Nevada By Jennifer Shubinksi / Staff Writer It may come as no surprise to those in the real estate industry that Nevada is near the top of the heap when it comes to mortgage fraud. According to the Mortgage Asset Research Institute (MARI), Nevada ranks seventh when it comes to alleged mortgage fraud and material misrepresentation reported by major mortgage lenders, agencies and insurers to a MARI database. Instances of alleged mortgage fraud continues to grow and is affecting more companies and communities, MARI reported. The most recent statistics from the FBI indicate that there was a seven-fold increase in reports of mortgage fraud — from more than 3,000 in fiscal year 1999 to almost 22,000 in fiscal year 2005, the institute reported. The FBI also has reported that federally-regulated institutions reported more than $1 billion dollars in losses because of mortgage fraud in fiscal year 2005, the group reported. One of the latest problems in mortgage fraud complaints are problems with appraisals, said David Berenbaum, executive director of the Center for Responsible Appraisals and Valuations. The center was established last fall by the National Community of Reinvestment Coalition of Washington, D.C., a nonprofit group in operation that works to ensure fair lending practices. "Many people are trapped in an upside-down loan, in that the value of the mortgage exceeds the value of the house," he said. "Valuation issues are of grave concern, and there are growing numbers of appraisal fraud issues in companies' portfolios." Berenbaum said too often appraisers are pressured by lenders to "come in" at a predetermined number, or risk being black-listed or by withholding payment. The problem continues even in Las Vegas' cooling housing market, said Debbie Huber, owner of Huber Appraisal Inc. and president of the Nevada Commission of Appraisers. Huber said she receives several phone calls a day from a lender asking her to hit a target number in an appraisal. It happens so often that Huber and her staffers have a response posted by every phone: "I cannot accept the assignment with this condition because it violates professional ethics. You should be aware that I must develop the appraisal before I will know the results. I can only accept this assignment if you remove the predetermined value requirement." Huber said the callers usually hang up, some are bold enough respond that they'll find someone who will. "I had one loan officer that told my office manager 'good luck with your business, you're going to need it,' " Huber said. The Nevada Appraisal Commission only handles disciplinary matters regarding an appraisal. There are few places appraisers can go when they have a dispute with a lender. In some cases they may be able to file a complaint with the state's Mortgage Lending Division. The Center for Responsible Appraisals and Valuations is hoping that it can become a resource for appraisers nationwide when it comes to disputes between appraisers and lenders, Berenbaum said. The Center's resolution system involves a tiered approach where online negotiation is followed by mediation and, finally, arbitration. The Center also is encouraging lenders, appraisers, realtors and others in the housing industry to sign a "Code of Conduct" to ensure homebuyers and homeowners receive accurate and fair appraisals for their homes. Berenbaum said the group also plans to begin tracking complaints filed with the states nationwide. "Hundreds of complaints are not being acted on by state regulators," he said.