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Mortgage and investment fraud are at an all-time high and there are serious consequences for appraisers who become involved in suspicious transactions. This book describes common methods of deception used in fraudulent schemes involving commercial properties and land. It presents various situations and conflicts of interest that have the potential to exploit the appraisal process for dishonest purposes.
Types of commercial real estate fraud:
- Misrepresentations made by sellers to buyers
- Misrepresentations made by brokers to buyers
- Misrepresentations made by borrowers to lenders (mortgage fraud)
- Misrepresentations made by brokers to lenders (short sale fraud)
- Misrepresentations made by syndicators or others who are compensated for organizing buyers (syndication fraud)
- Fraudulent deed conveyances
- Misrepresentations made by decision makers who have a vested interest
Appraisers who can detect fraud can protect themselves from relying on inaccurate information that could compromise the valuation analysis. By thinking critically and challenging assumptions, commercial appraisers can keep out of trouble, whether it is trouble for themselves or for others who rely on their work.
Would you recognize the signs of fraud? Download this checklist.
About the Author
Vernon Martin is a Certified Fraud Examiner (CFE). He has been a practicing commercial real estate appraiser since 1984 and is currently president of American Property Research, an advisory practice he founded in 2006. He has previously served as chief commercial appraiser at three national lending institutions and as fraud solutions product manager at CoreLogic. He received his master of science degree in real estate from Southern Methodist University and an undergraduate degree in urban geography from the University of Chicago. He taught real estate valuation at California State University, Los Angeles, from 1998 to 2005 and has published numerous articles in professional journals, including The Appraisal Journal.