Real estate practitioners in Nevada, one of the areas hit hardest by foreclosures, say low-ball appraisals are slowing sales and preventing recovery.
Mark Stark, CEO of Prudential Americana Group in Las Vegas, says he thinks appraisers are too focused on projecting how much prices could fall rather than reflecting what values really are.
“The appraisers are being very conservative,” Stark says. “They are trying to cover themselves.”
Mark Madsen, communications director for Raintree Mortgage Services, says appraisers are just doing what they’ve been told. “I think appraisers are scared to get blacklisted,” he explains. “If the appraisals are too high, then banks may no longer accept appraisals from that person.”
Source: Brian Wargo, Las Vegas Sun
Mortgage fraud increased 26 percent in 2008 compared to 2007, according to a study released Monday by the Mortgage Asset Research Institute.
The increase reflects fewer loans. About $1.4 trillion in home loans were made in 2008, down a third from the previous year.
More than 60 percent of the mortgage fraud cases last year were tied to falsified applications; 28 percent reflected falsified tax returns or financial statements; and 22 percent were related to appraisals.
The fastest-growing scams, the report said, are perpetrated by foreclosure prevention specialists, who offer to rescue distressed borrowers, then flee with their money.
The 10 states with the most fraud (in descending order) were:
- Rhode Island
- New York
Source: The Associated Press, Alan Libel (03/19/2009)