Home Insecurity: How Widespread Appraisal Fraud Puts Homeowners At Risk, a report released by Demos, explores the issue of appraisal fraud. The conclusions are not surprising, among them - appraisers feel pressure to inflate property values, inflated appraisals are contributing to potentially unsustainable housing costs, homeowners encouraged to borrow more than homes are worth, and government oversight of the appraisal process is inadequate. The report recommends a thorough investigation of the scope and causes of appraisal fraud by a Federal agency in collaboration with state regulators and with the input of a range of participants in the mortgage industry. The report suggests that reform proposals should:
- Ensure Appraiser Independence
- Punish Lenders, Brokers and Real Estate Agents Who Pressure Appraisers
-Sanction Dishonest
-Streamline the Complaint Process
-Increase Enforcement Capacity
-Educate Consumers About the Problem of Appraisal Fraud
Rachel Dollar, the editor of Mortgage Fraud Blog is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors.