Appraisers

According to the quarterly Mortgage Fraud Risk Report from Interthinx, there was a 22 percent decline in property valuation fraud risk over the previous year. Occupancy fraud risk increased 25 percent.
Valuation fraud can occur at origination with inflated appraisals or on short-sale transactions with artificially low estimates, according to a June 2 MortgageDaily.com article.

The Appraisal Institute is encouraging its members to write to Pennsylvania legislators to support a bill regulating “appraisal management companies.” Appraisal management companies are defined by the Bill as anyone “that provides appraisal management services and acts as a third-party intermediary between a person seeking a valuation of real estate and an appraiser or firm…

The Dept. of Labor has issued a proposed rule to revise the definition of “fiduciary” in the Employee Retirement Income Security Act (commonly known as “ERISA”) and the Internal Revenue Service regulations. The proposal will affect whether appraisers who work with pension and 401(k) plans and IRAs will be deemed to be fiduciary investment advisors.
Continue Reading Dept. of Labor Proposes Extending Fiduciary Status to Appraisers

The Treasury Department’s Financial Crimes Enforcement Network issued its Mortgage Loan Fraud update reports for the first 2 quarters of 2010. Those reports included statistics relating to “suspicious activities” regarding appraisal activities. It found that between 5 and 6 percent of the overall reports of suspected mortgage fraud in the first half of 2010 had some…

U.S. and international accounting proposals are being circulated which could impact the way private equity, venture capital and other alternative private investment funds explain how they appraised an asset including real estate. According to a recent story in Pensions & Investments, managers of these funds could face much tougher rules on explaining how they arrived…