In answer to your question about the appraisals, I am as confident as Steve is that those appraisals have serious and obvious problems. For one thing, appraisers are required to analze and reconcile the sales and listing history of their subject property when appraising them for mortgage lending. $100k spiffs over list price on a house in the $500k range just doesn’t happen and I cannot imagine what rationale those appraisers were using. Strike that, I can well imagine the required analyses weren’t performed.
As for ignorance, that is no defense. We are required to adhere to competency requirements, which include being familiar with the market wherein we are working. There’s no way an appraiser could legitimately see 20 closed sales in a search for comps and not recognize that 15 of the sales fit in with the larger trend and the 5 that don’t are so far outside as to be obviously fraudulent. Market analysis isn’t rocket science and there’s no way an appraiser can claim ignorance when appraising a tract home and expect to get away with it.
I can practically guarantee a couple appraisers will go to jail if some of these homes really were overvalued by that much. Conspiracy to commit mortgage fraud isn’t something the FBI is just going to let slide.
