Attorneys at Arnold & Wadsworth have litigated a number of loan fraud and appraisal cases for local banks as well as consumers. These are hot button cases right now, because so many appraisers were willing to fabricate and inflate appraisals to maintain their business relationships and so many people involved in real estate transactions are not honest or are simply ignorant of the rules governing real estate transactions.
HOW DO YOU KNOW IF YOU WERE THE VICTIM OF AN INFLATED APPRAISAL?
The answer to this question is you need to obtain a retroactive appraisal. You may have a hunch already if your loan officer told you that he or she was having a hard time coming up with value to justify your purchase price and/or loan. The ugly truth about this industry is appraisers only had a book of business based on the loan officers they worked with. However, if their appraisal stopped the transaction from going forward then the appraiser loses his clients (loan officers). This is why loan officers can no longer speak or communicate with the appraiser in any way.
Banks and consumers are hurt by this practice and the only parties that make money are the appraiser and the loan officer. Many banks have employed loss mitigation to these transactions and are suing the loan officers and the appraisers. You will find that the builder-if it is a construction loan-is often involved with this as well. Attorneys at Arnold & Wadsworth have sued all these parties for their participation in these schemes for banks and consumers.
HOW DO YOU KNOW IF YOU WERE THE VICTIM OF LOAN FRAUD?
You may have heard that a particular loan officer is “really good.” This usually means that the loan officer is merely good at dressing up your loan file so that it will get passed underwriting. The problem is this really means that the loan officer is doing something to hurt you in the long run, and is likely fabricating documents that you will never see or dressing up a loan application to alter your income or expenses, and will either never show it to you or will advise you that he or she is calculating your income and expenses how they are supposed to.
If you are propositioned by a “great deal” or “great business” opportunity involving real estate transactions you are likely being played and used. We have cases, among many others, where third parties took out second and third mortgages using someone else’s credit, where the loan officer fabricated the loan application or altered it, fabricated the credit report, or where an unlicensed party took loan origination fees.
If you are a lender, bank or consumer and think you may have been the victim of loan fraud please contact Matt Wadsworth or Brian Arnold at Arnold & Wadsworth for a consultation.