How is an opportunity created to commit appraisal fraud? Does the appraiser act
ID: 2583865 • Letter: H
Question
How is an opportunity created to commit appraisal fraud? Does the appraiser act alone, or is collusion routinely involved? How is appraisal fraud detected? Is intent to deceive easy to prove in appraisal fraud? What pressures or perceived pressures can motivate appraisers to make faulty valuations? How do appraisers rationalize their fraudulent behavior? Why would a county perceive pressure to fraudulently inflate property values? What controls would help to prevent appraisal fraud? What natural controls exist to prevent homeowners from the desire to "massage the value" of their homes?
Explanation / Answer
1. Appraisal fraud is created to get more funds out of the mortgaged assets.
2. He may in combination with others create an appraisal fraud.
3. Appraisal fraud is detected by Substantive Procedures or making direct inquiry with the others.
4. Appraiser makes a faulty valuations on the force of clients to get more valuation of the property.
5. They make a faulty valuations to get more funds from the bank on the basis of market value of properties.
6. The Bankers should get a second valuation of the property from independent sources and which are not in direct contact with 1st Appraisal