Appraiser identity theft becoming critical issue

A "loose network of crooked real estate appraisers" is systematically stealing the identities of legitimate appraisers in the Chicago area and nationwide and using them to engage in multimillion dollar mortgage fraud, the Chicago Tribune reported last week.

The paper reported that Illinois' Department of Financial and Professional Regulation can't keep up with complaints from state appraisers whose signatures and license numbers have been misappropriated in the last two years. The Department's one full time appraiser investigator retired last month.

The paper reports:

[I]n recent years, as identity thieves capitalized on a red-hot home loan market, dishonest appraisers made the crimes more lucrative, jacking up the value of targeted buildings by misrepresenting conditions or inventing comparable properties.

To help cover their tracks, they filed the reports using legitimate appraisers' names. The forged reports often got little scrutiny from lending firms, as falling interest rates and rising home values fueled a go-go real estate market.

States around the country report a lack of resources to investigate and prosecute dishonest appraisers. Sometimes, simple glitches in state law compound the problem. The Tribune reported that unlike, for example, veterinarians and acupuncturists, Illinois doesn't have the statutory power to temporarily revoke the license of an appraiser pending resolution of complaints.

The problem extends beyond scammed home buyers and the appraisers whose identities are misappropriated. Legitimate appraisers everywhere risk being tainted by the actions of a relatively few felons.

An effective advocacy organization for appraisers would be working Washington to ensure that policymakers and their staffs understood the importance of appraisers to the housing economy. No one would win – not homeowners, not lenders, and not appraisers – if a misunderstanding about appraisers' roles led to federal laws or regulations undermining professional appraisal as central to the health of the American economy.

At our second annual Winter Convention in Las Vegas January 16-18, we'll be discussing these issues and more. If you're not among the 1,600 attending, watch this space for important news on the future of appraisal advocacy.

If you're an Aurora user, you already have powerful tools to protect yourself from identity and signature theft. PDF security in WinTOTAL allows you to lock down a report to guard against data being be copied electronically and the report being altered directly. Since these features aren't active by default when you first install Aurora, do these steps, only once per PC, to enable PDF security: Open a report, choose File, Print to PDF, and in the print dialog box that opens, click More Printing Options in the lower right corner of the window. Click the Edit PDF Security link, check all the boxes there and add a password. Save and print.

In addition, state of the art Secure Socket Layer (SSL) technology is used to encrypt your data when you log into your XSite. And your signature is password protected, form data is encrypted in .ZAP files, and the software can only be used by the registered user. Beyond the software side of things, make sure you're careful who you allow access to your signature and identity information in your office, and generally use common sense and caution.