Mortgage Appraisal Fraud

Appraisal Fraud:

Occurs when a home’s appraised value is deliberately overstated or understated. When overstated, more money can be obtained by the borrower in the form of a  seller in a purchase transaction, or by the organizers of a for-profit mortgage fraud scheme.

Appraisal fraud also includes cases where the home’s value is deliberately understated in order to obtain a lower price on a foreclosed home, or in a fraudulent attempt to induce a lender to decrease the amount owed on the mortgage in a loan modification. A dishonest appraiser may be involved in the preparation of the fraudulent appraisal.


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