NCRC Exposes National Trend: Appraisal Fraud, Over Valuation Placing Homeowners & Market at Risk; NCRC Announces Responsible Appraisal Campaign to Assist Consumers, Advocate for Consumer Protections, Develop Industry Best Practices
WASHINGTON, June 6 -- Today, the National Community Reinvestment Coalition (NCRC), released a report titled “Predatory Appraisal - $tealing the American Dream,” critical of the prevalence of fraudulent and/or discriminatory practices in the appraisal of residential real estate. This research was prompted by a dramatic increase in the number of requests from consumers in NCRC’s National Anti-Predatory Lending Consumer Rescue Fund (CRF) during the past year that have been victimized by appraisal fraud and over valuation.
The report reveals that as lenders and other industry insiders pressure appraisers to inflate home values, many consumers, in return, find themselves struggling with a higher mortgage than home equity and even the possibility of foreclosure. The prevalence of “upside down” mortgages is a serious issue, however, the report reveals that the impact and complexity of predatory appraisal practices does not stop there. Abusive practices manifest themselves in many ways and are documented in great detail in this report in the form of consumer “vignettes” which place a human face to the issue.
From a consumer protection perspective, NCRC’s report reveals that predatory appraisers and appraisal practices, combined with consumer protection loopholes and the absence of meaningful industry standards, are facilitating the theft of equity from homeowners nationwide and, in the process, threatening the safety and soundness of the market.
John Taylor, president and CEO of NCRC, noted the importance of the report. “Problematic appraisals destroy entire communities, leave the secondary market in extreme risk and endanger the market place as a whole. These abuses must end before the bi-partisan American dream of homeownership is stolen from the entire nation.”
The significant increase in referrals to the NCRC National Anti-Predatory Lending Consumer Rescue Fund comes at a time when Federal regulators are also beginning to express concern about mortgage valuation and appraisal issues. “The link between safety and soundness, predatory lending and responsible lending practices is becoming clearer – and NCRC is sounding the alarm for action and oversight on each level of the issue. The creation of the Responsible Appraisal Campaign will promote partnership with industry and a safety net for consumers,” stated David Berenbaum, NCRC’s executive vice president.
NCRC’s new campaign will create a resource for consumers and industry alike. In announcing the campaign, NCRC will be:
1. Creating an Internet site at http://www.responsibleappraisal.com to educate consumers and industry to the prevalence of the problem.
2. Release a new Responsible Appraisal Campaign Consumer Education Brochure
3. Announce a Consumer Assistance Hotline at 800-475-NCRC
4. Initiate a campaign with NCRC’s Banker Community Collaborative Council & Mortgage Finance Community Council, The Appraisal Industry, securitizers and others to develop meaningful best practices, stronger laws, and other innovative solutions to overcome the problem.
For more information on this campaign and/or to receive a copy of the report contact NCRC at 202-628-8866 or http://www.ncrc.org.
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