On Monday, Appraisal Scoop's article eAppraiseIT v. Pamela Crowley: Founder of the Mortgage Fraud Watch List sued by AMC reported on a claim by Pamela Crowley that eAppraiseIT is unlocking and changing security settings in appraisal reports that pass through them to lender clients.
The following are excerpts from the National Community Reinvestment Coalition (NCRC) testimony by David Berenbaum, Executive Vice President, before the Senate Committee on Banking, Sub-Committee on Housing, Transportation and Community Development . Thanks to Taylor Driscoll of Charlotte, NC for the source link!
EXCERPTS from: Ending Mortgage Abuse: Safeguarding Homebuyers
Tuesday, June 26, 2007
“The lending industry has created a system in which no one is accountable when the tsunami hits borrowers. Brokers and lenders quickly sell loans into the secondary market. The secondary market has precisely diversified risk to the point where no one investor loses significant amounts, even when foreclosures spike. Too many servicers, appraisers, and foreclosure legal specialists have also figured out how to profit from abuses in the dangerous game of mortgage monopoly.”
Appraisal Fraud (Pg. 10)
“Predatory loans include several features such as steering that increase costs beyond the point at which borrowers can afford their loans. Another factor that drives up loan costs is appraisal fraud. Appraisal fraud is commonplace in the housing market and is the result of collusion among abusive lenders and appraisers.”
“Originator sanctioned appraisal inflation is the dirty little secret of the lending industry. We welcome this hearing and commend you Chairman Schumer, for looking into a problem that nobody likes to talk about but, in many ways, has triggered the sub-prime time bomb.”
- Why is it that brokers are allowed to self select valuation professionals?
- Why is it that is lenders are forced to rely on AVM’s – which are highly inaccurate themselves – due to widespread mortgage fraud in the marketplace?
- Why is it that, despite the protections of FIRREA and the requirements of USPAP, appraisal companies are beginning to sanction the “unlocking” of appraisal reports performed by valuation professionals and changing their content – a clear violation of the law?
Their response, when licensed appraisers began to question the legality and impact of this activity – is to threaten or hit the whistle blowers with slap suits.”
Just ask Pamela Crowley, a Florida appraiser and a signatory member of NCRC’s Center for Responsible Appraisal & valuations who created http://www.mortgagefraudwatchlist.org/ to expose lender pressure and valuation fraud, She is being wrongfully sued by an appraisal management company for having the integrity to expose this issue.”
“Senator Schumer, your focus on valuation issues is right on point. When the bottom falls out, borrowers are left in upside down mortgages where they owe more than the home is worth. Many sub-prime and prime borrowers are finding themselves in just this situation. We must work to stop lenders, mortgage brokers, real estate agents and title companies from pressuring appraisers to inflate home prices.”
The excerpts above are from NCRC: Ending Mortgage Abuse: Safeguarding Homebuyers
Additional Resources:
- Hearing Detail - Witness testimony links
- Appraisers push for real estate fraud rules - CNN Money.com
- Download eAppraiseIT v PCrowley Complaint (709.8K)
- Download Emergency Hearing Notice Request (344.0K)
- Download eAppraiseITvPamelaCrowley.pdf (18.1K)
- Reporting and Stopping Mortgage Fraud - Working RE Magazine
Recent Comments