Appraisers' Free Forum

**Otis**

I just wonder if Washington DC is paying attention to the ones going to jail? It seems to me that there are a hell of lot more MBs, LOs, executives and "independent" thieves going to jail than appraisers!

http://in.reuters.com:80/article/marketsNewsUS/idINN12191520080612

**Steve Owen** · Posted: Thu Jul 03, 2008 10:25 am Post subject:

That's right, Otis. But, what do you think would happen if you made a close examination of the reasons for that?

Upon just a cursory examination I can come up with a few.

1) This kind of embezzlement is not really a real estate crime... it is simple theft. That's the kind of crime the feds are good at catching. Appraisers never have such an opportunity.

2) Appraisal regulations that appraisers have been complaining for years are too complex actually work to the appraiser's favor when confronted with wrongdoing. If the appraisers can't understand the regs, how do you expect your typical FBI agent (or jury) to understand them?

3) Appraisers are usually the small fish. In most of the mortgage fraud cases I've followed in Missouri there are four primary players: The MB who organizes the fraud, the straw buyer, the seller, and the appraiser. The first two are the big fish. The seller can often walk because they say "I didn't know they were doing a fraud, I was just selling my house." The appraiser, without whom the whole deal could not work, pleads out to small charges (Hey, all I got was my fee) and loses his license.

I'm sure if you put your mind to it you can come up with some more. But, the bottom line is... many, if not most, mortgage fraud schemes would not work if there wasn't a crooked (or at least ethically challenged) appraiser at the bottom of it.
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