By popular demand I have decided to delve deeper into the concept of appraisal fraud. In previous posts I have addressed several aspects of appraisal fraud, including its definition and various aspects to try to help the reader to understand that an appraiser can be inept or inexperienced without being a crook .
What I cannot stress enough, is that fraud is a legal term. It is a term that only applies at the time of conviction. A conviction only occurs through the legal process and until such time, we are all considered innocent until proven guilty. Therefore, reviewers, auditors and investigators should be wary of suggesting that a misstatement of fact or an unsupported opinion is “fraud” or “misrepresentation” . By inflaming the language of review we increase our risk in two ways. First, the inflammatory language can be construed as slanderous. Even though the US has a constitutional freedom of speech, if comments that are place in a review document or audit affect the livelihood of an appraiser, there is ground for a lawsuit and frankly, the appraiser has a good case to win.
Secondly, this industry is a relatively small one, therefore if injurious statements are made about an appraiser, they could be forced away from legitimate clients and into the hands of lenders who want appraisers with moral flexibility.
When we come across appraisals that have an appearance of having been inflated or written in a manner that could be construed as misrepresentation, we have an opportunity to make contact with the appraiser to seek clarification. During the process of review, we have the opportunity to support the appraiser and to guide the process towards integrity. It is like raising a child, if we are constantly accusing and critical, this child will only learn to hide better. But if we are honest and encourage integrity then the appraiser “grows up” to be better at their job and better serve the overall community.
Let us all strive to be better at our jobs and to deal honestly with one another. This can only result in an improvement within the lending community itself.
See you around the water cooler!