Appraiser Fraud and Negligent Appraisal Claims
Defenses and Counter-Claims to a Bank Foreclosure
As we all know, the real estate appraisal, which provides the current value of real property, serves an important function in a real estate transaction. Property valuation is important to several parties including buyers, sellers, investors, financiers, and insurers. Buyers and sellers rely on the appraised value to confirm a fair price for the property. Banks and other mortgage lenders use appraisals to support their loan decisions. Insurers use the appraised value to determine the cost for coverage for items such as title insurance and homeowners and flood insurance policies. Examining the appraisal when defending a foreclosure can lead to the discovery of problems and claims against the bank; had the bank properly reviewed the appraisal when they were underwriting the loan they should have discovered the property was overvalued and therefore denied the loan to the homeowner.
Faulty appraisals also cause problems during the foreclosure process. For instance, if a property was appraised for a value that was higher than its true value, and consequently over financed, a subsequent foreclosure on the mortgage could result in a foreclosure sale price substantially less than the mortgage balance. This in turn affects the amount of the deficiency judgment the lender may pursue against the borrower related to the unpaid balance of the note.
For these reasons, it is important to hire an experienced real estate lawyer if you believe that your home has been wrongfully (either fraudulently or negligently) appraised. If you are in foreclosure, Larry will request a copy of your appraisal from the bank to determine if a defense or counter-claim exists. Larry has extensive experience in real estate matters for more than 20 years and is familiar with issues related to appraisal fraud.
One of the many things that sets Larry apart from other Real Estate Attorneys is his knowledge of real estate having owned numerous properties for himself as well as having been a mortgage broker prior to practicing law. That experience allows him to understand and approach real property issues from a different view point, not just from a lawyer’s perspective.
What is Appraisal Fraud?
Appraisal fraud occurs when there is an intentional and material misrepresentation of the value of real estate. Recent lawsuits have shed light on lenders coercing appraisers to provide artificially inflated appraisal values, to facilitate things like property flipping, or risk losing referrals from the banks in the future. The result is borrowers are misled as to the true value of the properties they were buying all in an effort to generate profits.
What is Appraisal Negligence?
Appraisal negligence is when an appraiser does not exercise the degree of care and skill that an ordinary appraiser would exercise. For example, the appraiser may use outdated sales comparisons or improperly adjust for the value of the subject property (for items such as location, square footage, and property age) to establish value. Also, the appraiser may overestimate the cost and income capitalization approaches when valuing property or not give those methods much weight at all in determining value.
If you feel that your home was improperly valued because of any of these reasons or any other reason, you should talk to an experienced real estate attorney who can help to recover any damages that you may have suffered.
Get A Free Case Evaluation From An Experienced Real Estate Lawyer - Call 954-458-8655
If you would think you are the victim of appraisal fraud or would like more information about appraiser negligence contact Larry today. You can contact him by phone at 954-458-8655 or by e-mail. He offers a free initial consultation.
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