Mortgage Fraud Prevention

Mortgage fraud has made headlines locally and nationally. While most real estate professionals are ethical, understanding how fraud occurs — and how appraisers prevent it — helps protect your investment.

How Mortgage Fraud Works

Most mortgage fraud involves making a borrower appear more creditworthy than they are, or misrepresenting a property's value. Some fraud involves a broker or loan officer telling the lender and borrower that a house is worth more than it is, allowing a larger loan and bigger commission.

Sometimes honest appraisal reports are simply altered or signatures forged. But a complicit appraiser can make fraud easier to perpetrate. At the same time, honest appraisers are homeowners', lenders', and the economy's best defense against this type of fraud.

Why Appraisers Are Your Best Defense

Appraisers are paid a set fee for their work, whether a deal closes or not. We work for the lender — the party considering loaning the money — and provide an objective, third-party professional opinion of true market value. That lender needs to know that if a borrower defaults, the home securing the loan is valuable enough to cover their loss.

We do not work for individual commissioned loan officers, mortgage brokers, or real estate agents. If we did, there would be too much pressure to "make the deal work" rather than arrive at a considered opinion of value.

Protecting the Homeowner

While borrowers don't directly hire the appraiser in a mortgage transaction, nobody benefits more from an honest, professional valuation. If catastrophic events like job loss, illness, or divorce force a homeowner to sell, they need to be able to sell the home for enough to cover the mortgage balance.

A professional appraiser ensures you're not paying more than a property is worth — protecting your most important financial asset from the start.