Investopedia

Continue to Site »

Appraisal Fraud

Filed Under » , , ,
Dictionary Says

Definition of 'Appraisal Fraud'

A form of mortgage fraud, whereby the value of a home is deliberately appraised above its market value. The overstated value obtained through Appraisal Fraud is commonly used to:
  • Help a seller get a better price than the market would warrant
  • Help a buyer get financing because the mortgage amount could be much less than the appraised value of the home
  • Help a homeowner get a preferable refinance, or home equity loan
Appraisal fraud can occur when an appraiser is in on the scam, and dishonestly overstates the value of the property. It can also occur when the homeowner, seller or purchaser physically alters an "honest" appraisal using methods such as digital editing.
Investopedia Says

Investopedia explains 'Appraisal Fraud'

Appraisal fraud, is one of the most common types of mortgage fraud. To protect themselves from this, banks will often set up the appraisal themselves when doing a mortgage or refinance. Homeowners and prospective homeowners should be just as careful, and make sure that they have an independent second opinion whenever they are going to make a decision based on somebody else's appraisal.

Articles Of Interest

  1.

    10 Tips For Getting A Fair Price On A Home

    Don't let buying a home bust your budget. Make sure the house you choose is worth the price you pay.

  2. Avoid An Audit: 6 "Red Flags" You Should Know

    Don't make yourself a target - steer clear of these attention-grabbing tax-filing practices.

  3. Home-Equity Loans: The Costs

    Learn the factors to consider when comparing the different programs offered by various lenders.

  4. 4 Steps To Attaining A Mortgage

    It starts with knowing your choices as well as your price range. We show you how to get there.

  5. Avoid Capital Gains Tax On Your Home Sale

    If you have property to sell and want to avoid capital gains tax, a Section 1031 exchange may be the answer.

  6. Pre-Qualified Vs. Pre-Approved - What's The Difference?

    These terms may sound the same, but they mean very different things for home buyers.

  7. Top 7 Most Common Financial Mistakes

    Choose fortune over disaster by avoiding these money traps.

  8. 6 Things You Think Add Value To Your Home - But Really Don't

    Not everyone wants to spend their weekends shaping backyard topiaries. Even though you may enjoy the improvements you make to your house, it doesn't mean that they'll increase its value.

  9. How To Safeguard Your Tax Returns From Identity Theft

    Identity thieves love tax season. In 2012, there were 13 million victims of identity theft. As easy as it is for thieves to steal your information, there are also simple measures you can take ...

  10. How To Report A Tax Cheat

    If you report a tax evader to the IRS, you could be eligible for a reward.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Winner's Curse

    Because of incomplete information, emotions or any other number of factors regarding the item being auctioned, bidders can have a difficult time determining the item's intrinsic value. As a result, the largest overestimation of an item's value ends up winning the auction.

  2. Glocalization

    A combination of the words "globalization" and "localization" used to describe a product or service that is developed and distributed globally, but is also fashioned to accommodate the user or consumer in a local market.

  3. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  4. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  5. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  6. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.
Trading Center