Showing posts with label appraisers. Show all posts
Showing posts with label appraisers. Show all posts

Wednesday, March 10, 2010

Appraisers: Obama plan encourages fraud

Real estate appraisers today announced their opposition to part of an Obama administration plan to pay homeowners in trouble to move if they agree to a short sale, saying the program will lead to mortgage fraud.
.
Under the plan, which takes effect April 5, delinquent borrowers who couldn’t get a loan modification can get $1,500 to move if they sell for less than the balance of the mortgage. Banks and second mortgage lenders would get $1,000 to process each of these short sales.

The plan will allow a lender to use real estate brokers — not appraisers – to come up with a home’s value, a figure that won’t be given to the owner. If an offer comes in equal to or higher than that amount, the lender will have to accept.

The appraisers object to the “broker price opinions” to be used to determine the value of properties to establish a minimum offer, a procedure also used in government loan modification programs.

The letter a coalition of appraisers sent to Treasury Secretary Timothy Geithner states:

“We strongly believe continuing to allow ‘broker price opinions’ (BPOs) in the property valuation component will not adequately protect the public interest (consumer, borrowers, etc.) or the interests of the various parties to the loan (lenders, loan servicers, etc.) and is likely to exacerbate mortgage fraud. 

“According to an independent fraud investigation firm, bank-owned fraud attributed directly to schemes involving shorts sales and REO inventories has increased by nearly 50 percent over the past year and 100 percent over the past two years.The Financial Crimes Enforcement Network and other major law enforcement officials have also issued advisories and notices highlighting fraud scenarios involving loan modification, which oftentimes include short sales.

“Generally speaking, real estate agents and brokers are not independent or properly trained valuation specialists. They have an inherent bias towards quick results and action which produces a fee for themselves irrespective of whether the lender/services/investor/property owner/borrower gets a fair return on the short sale. We believe that such conflicts can and should be mitigated by implementing basic requirements reestablishing independence and competency in the valuation process.”

See the N.Y. Times story on the program HERE.

See the full letter HERE.

 

http://mortgage.freedomblogging.com/

Posted via web from The Newport Beach Lifestyle

HVAC boot cleared of Asbestos in Los Angeles

http://www.ewastedisposal.net