Deja Vu - Lending Crisis Exposes Appraisal Fraud?! Part 2 of Lawyers, Liars & Litigation: Real Estate Sales ~ A Liar's Paradise (Who's Telling the Truth, Who's Not, Who Cares and Who Doesn't)
Part 2 ~ Ramifications and Consequences In Part 1 of this series, Tools from the Liar's Toolbox, I described the types of "truthyness," one might encounter. Last week, Geno Petro and Gary Elwood received first and third place Bloodhound awards, respectively for their articles in truthfulness. Kevin Boer described Elwood's article as "proposing the radical idea about getting people to believe you, by, uh, telling the truth." Well said, Kevin.
Real estate affiliates have complained for years of subtle pressure from clients, e.g. buyers, sellers, and licensees. Many of these real estate professionals such as escrow officers, inspectors, loan officers and appraisers remained steadfast in providing honest and ethical services.
Who was minding the store?
Yet, not all real estate professionals took the correct and legal path. Hence, short-sales and foreclosures dominate the news and strain the economy. Not Again?! As an honest real estate professional, I get to work through yet another lending quagmire, seeped in appraisal fraud, perpetrated by lies of licensees and consumers alike, all with one common goal in mind ~ defraud the lender.
Home prices rise quickly on the way up!
It does not matter if an appraisal was artificially inflated through collusion or coercion, the rippling effect is one of price by "leap frog." The stage is set, with overinflated homes in the neighborhood based on deception. One after another. The dishonest individuals involved with the original false appraisal, were looking to make a killing on one home, and in many cases, wound up injuring a whole neighborhood.
Pat Kapowich, "Negotiating Smooth Transactions Throughout The South Bay" SiliconValleyBroker.com