Oct-05: Reported losses on mortgage fraud more than doubled to $1.014 billion so far in 2005, making the category one of the fastest growing types of white-collar crime in the United States, according to the FBI. Mortgage fraud has surged as the boom in U.S. housing has encouraged criminals, Derek Siegle, assistant chief of the financial crimes section of the FBI, said at a panel discussion of the Mortgage Bankers Association in Orlando. The FBI this year has 22,000 reports of suspicious activity related to mortgages, up from about 17,000 in 2004, he said. States where mortgage fraud is most prevalent are Florida, California, Nevada, Utah, Arizona, Colorado, Missouri, Maryland and Georgia, he said.

On October 28, 2003, the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS), and the National Credit Union Administration (NCUA) (the Agencies) jointly issued a statement to address concerns identified during examinations about the independence of the collateral valuation process.

This statement clarifies and reminds banks of the existing standards for independence within the appraisal and real estate lending regulations and the Interagency Appraisal and Evaluation Guidelines. It applies to all real estate-related financial transactions originated or purchased by a national bank or operating subsidiary for its own portfolio or as assets held for sale.

Banks are reminded that the board of directors is responsible for ensuring that policies and procedures are adopted that establish an effective, independent real estate appraisal and evaluation program that covers all lending functions. A key element of the program must be the independent selection of qualified and experienced individuals to appraise or evaluate real estate. The individuals selected also must be independent of the transaction, and not subject to external or internal influence. Finally, a qualified individual who is not involved in loan production should review the reports.

As a result of the fallout resulting from the Enron and WorldCom fiasco, we find ourselves in a position of ever increasing scrutiny.  In order to ensure the quality of the appraisal and maintain the public trust it is essential that appraisals be reviewed by an unbiased and independent third party.

So where can you turn?  While many national management companies and automated services offer appraisal review, only a local and knowledgeable appraiser can provide a true secondary opinion of value.  The New York Appraisal Management company is the more responsible alternative.  Our team of appraisal reviewers offers unmatched experience and knowledge regarding value trends, FNMA guidelines and generally acceptable appraisal practices.  Our reviews are independent of the mortgage process and offer a truly unbiased opinion of value and/or assessment of risk.

NYAMC is qualified to review both residential and commercial appraisals.

Give us a call today for more information: 516-826-4371.