Real Estate Appraisers goes to Prison

Florida prosecutors have convicted another real estate appraisal on mortgage fraud. The most recent is a Jacksonville, Florida licensed real estate appraiser who was sentenced to four years in federal prison for his crime.

The appraiser was not without a conspirator and together they committed mortgage fraud on fifty five purchase transactions in Florida.

The appraiser and his conspirator sought out to defraud mortgage lending institutions and had no intention of ever living or making payments on the properties purchased. The conspirator negotiated the sales price of the property in which the two had conspired to purchase with the seller. The conspirators then contracted the licensed real estate appraiser to determine what they could appraise the value of the property for. The conspirator after learning the inflated value of the property then submitted the mortgage application to the mortgage lending institution for approval. The conspirator submitted fraudulent income, assets and employment information to the lender in order to obtain a mortgage loan approval. The approval was given and when the mortgage lending institution distributed the funds the two collected the difference between the purchase price and the sales price at closing.

The Jacksonville appraiser in his plea agreement detail one of the fifty five purchase transactions that he and his conspirator arranged for him to act as the straw buyer for. The conspirator negotiated the sales price for the property at four hundred ninety thousand dollars. He as the appraiser of the property valued the property at six hundred twenty five thousand dollars. His conspirator submitted the first and second mortgage applications to the lending institution with fraudulent bank statements. The bank statement contained fraudulent cash balances. The lender approved the loans and at closing his conspirator received one hundred thirty thousand dollars that showed on the HUD-1 as Assignment of Contract Fee’s and the appraiser received twelve thousand two hundred fifty dollars shown on the HUD-1 as broker fees and five hundred dollars as an appraisal fee.

Court documents show that the Jacksonville appraiser and this conspirator cause lending institutions to approve over twenty nine million dollars in mortgage loans. The appraiser received over one hundred thousand dollars in commissions and fees. His conspirator received over six million dollars from the scheme and was sentenced to seven years in federal prison in November of 2009.

Cases like this are happening all across the United States; while Florida has been fit with the highest amount of this time of fraud it is not uncommon to the rest of the United States. The majority of these fraud cases happen because buyers and sellers are often uneducated in the mortgage industry. Buyers and Sellers simply don’t know the in’s and out’s of the industry and often don’t question the HUD-1 Settlement Statement.

The best thing as consumers to avoid fraud scenarios such as this one is to learn the signs of fraud and be proactive in learning about your mortgage loan. Fraud will continue until consumers fight back against the white collar criminals who prey on our lack of knowledge.