The inflated appraisals that run at the core of the mortgage meltdown context and crisis results in a number of claims against the lender, the appraiser, the mortgage broker, the real estate broker, the developer, and entities upline in the securitization process, plus the insurance companies carrying errors and omissions and other assurance on those participants.
Salient among these is the effect that the appraisal, known by those participants to have been inflated. Thus the borrower was taking a loss at closing without knowing it. This loss, while also considered damages if one is pleading fraud, produces a distortion of the annual percentage rate (APR) disclosure in the good faith estimate. Thus if the GFE states the APR at 6%, and the buyer loses $100,000 like a new car buyer driving off the lot, the interest rate on a 30 year mortgage would be at least 3% at variance with the disclosed APR.
Filed under: CDO, currency, Eviction, foreclosure, GTC | Honor, Mortgage | Tagged: Appraisal, APR, damages, good faith estimate |
Hi. Great weblog. I have a question for you. I recently found out that the appraisal on my house was for a 3 bedroom and it is actually a 2 bedroom…. What should I do? Is this considered a fraudulent appraisal?
Thanks