I really wish I didn’t have to say this, but a deal like this doesn’t get done without an appraiser enabling it. Whether it’s as a result of stupidity – appraiser can’t tell when a sales price is higher than the list – or outright dishonesty, the results are the same.

The appraiser is REQUIRED to review the sales contract and analyze the sales transaction as part of the appraisal process for those mortgages. Even if an agent hands an appraiser a doctored sales contract, the appraiser should be able to tell when a sales price exceeds a listing price, and when the sale price itself is not supported by the comps.

After all, the whole point of getting a 3rd party appraisal is (supposedly) to help the lender avoid making loans that aren’t entirely secured by the collateral.

Most likely the appraisal for that loan is a POS, and it’s equally likely that the lender’s underwriting process failed in not catching it. The appraiser is at fault for enabling the lie, the Lender is at fault for not checking up on the appraisal, the loan originator is at fault because they’re probably the one who coerced the appraiser to enable the deal, and the agents who conspired to put this whole thing together are at fault. Of these parties, it is the appraiser who deserves the most punishment because their sole job is to be honest and tell the truth. We expect the advocates to advocate; we expect the appraiser to be unbiased and tell it like it is.