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The appraiser's lonely fight against mortgage fraud Last week we wrote about how mortgage fraud is reported to be a prime mover behind artificially inflated property values in some local, fraud-prone areas. You agreed. We've never received more e-mail from our e-newsletter than we did last week, and far too many of you had fraud "war stories."

One appraiser wrote us:

"I was recently requested to complete an FHA appraisal on a home that had been flipped. A local [real estate agent] purchased the home for $7,500 had her maintenance crew put a poor paint job on the home then sold to three elderly friends living on a fixed income for $33,000. The loan officer agreed with the [agent] to use an FHA appraiser from [another market] instead of using a local FHA appraiser. The appraiser completes the appraisal for $39,000 with few or no requirements. It was a complete joke.

"The loan is completed and closed. The FHA underwriters got a hold of it and said, 'banker/loan officer, this loan looks like the home was flipped. Either get the receipts for all the repairs that were made on the home or get another appraisal from a FHA qualified appraiser.'...