Complaints against Illinois appraisers on the rise (& probably elsewhere)

[NVMojo]

and we wonder how things got so out of control ...


August 13, 2006

Appraisers are taking the heat in Illinois and nationwide for what some see as a bloating in real estate valuations.

A rising number of complaints against residential appraisers by Illinois consumers and financial institutions has spurred state regulators to ask for greater authority to crack down on abuses.

The charges include over-inflated appraisals, underestimates and criminal fraud, according to Daniel E. Bluthardt, director of the Illinois Division of Professional Regulation.

snip...

"What we have seen is a trend lately to outright fraud," he said. "Some is being conducted by people who are not licensed, but are using the names and license numbers of legitimate appraisers."

Five or six of these criminal cases are under investigation by the state, he said. When information of criminal fraud is developed, it is turned over to the local state's attorney. Federal authorities, such as the FBI, might also be involved, he said.

The Secret Service arrested a Wilmette licensed appraiser and a Highland Park man in May for a scheme that involved the inflated appraisal of a decrepit house, which had been legitimately appraised at $105,000. The inflated appraisal was for $257,800 and stated that rehab work had been done, which had not, according to Russell Collett, assistant special agent in charge of the Secret Service's Chicago office. The plan allegedly was to involve default on a mortgage for the higher amount by an unnamed accomplice who was to make a few payments and then disappear, according to authorities.

more...

http://www.suntimes.com/output/hlife/hos-news-appraise13.html

[larrysh]

1. An awful lot of mortgage brokers employ shady appraisers........

along with "credit fixers" who will do just about anything to make sure
a loan goes thru. With high commissions paid by the lenders (which includes a rebate on the interest rate, if the broker can convince some poor person with bad or mediocre credit that they must take a higher rate), there is enough money available on most deals to pay these lying appraisers $200.00-$300.00 extra per deal to falsify the appraisels.

[KT2000]

2. Interesting...........

there is so much to watch out for that I would not try to sell my house in this greed market. There are too many scavengers.

[Bamboo]

3. White on White Crime.

There is a radio ad for realtor.com that claims houses listed with realtors sell for 16% more than by doing it yourself.They do a market survey to set the house price but in my experience it is inflated.I know someone who listed a house for six months and got one offer 30% below and accepted.

I was following house prices in Florida in 2003 when the Federal Reserve was lowering interest rates and the day after a quarter point drop the list prices of houses would increase $1000.Easier rates make a larger mortgage possible and the realtors are eager to help.

Lawyers have a radio ad also for real estate attorneys featuring horror stories.Recently someone tried to sell me a plasma television from the back of their van.I wonder about people who think this is a good idea,do they also think they can call a talk show and win the argument.

http://www.myrealestatestory.com

http://www.kevincoffee.com/travel_scams.htm

[Warpy]

4. I had to laugh at the Zillow.com appraisal on my house

which is almost as beat up looking now as when I bought it 10 years ago, thanks to a few years of poverty plus disability.

According to them, this post WWII tract house in what is now the inner city has tripled in value in a town where shiny new subdivisions are being slapped up overnight.

This area will be pure gold as gas prices continue to skyrocket but it's not there yet.

I think much of this has been appraisal pump ups. The exceptions were places decent housing was actually in short supply, like Boston, NYC, LA and San Francisco.

[Greyhound]

5. Absolutely rampant out here. "Friendly" appraisers will commonly overstate

the value of a house by 20% - 25%, and often don't even bother to go look at the house to make sure it is there.

What the hell, there is no penalty and it's the buyers and lenders that suffer, so why not?