Tuesday, April 10, 2007

Indiana Passes Homeowner Protection Legislation

The Indiana House and Senate passed a measure that would give permanent status to the Indiana Homeowner Protection Unit, created nearly two years ago as a test program to address predatory lending practices - and, in particular, inflated appraisals. The Unit has filed 211 disciplinary actions against licensed appraisers and another 76 against licensed real estate agents & salespersons since its inception in mid-2005.  The Unit is currently investigating another 750 complaints filed against appraisers and real estate agents and salespersons.

“The benefit of the Unit is that it allows the relationship between appraiser, real estate agent, and lender to be analyzed in a coordinated way,” Indiana Attorney General Steve Carter said.  “Making this Unit permanent is an important step for Hoosiers.  We’ve made good strides the last year and a half and want to keep the momentum going.  By raising awareness of the Unit, we hope that more people will recognize that there is a place to turn to for help if they believe they have been the victim of, or suspect, questionable business practices by individuals or companies in these professions.”

In 2004, the Legislature established the HPU under Indiana Code §24-9 in an effort to address predatory lending practices.  These practices encompass acts such as inflated real estate appraisals, mortgage fraud and the offering of high cost home loans to some of Indiana’s most economically vulnerable citizens.  The Unit is funded from mortgage filing and license renewal fees of approximately $500,000 per year that was scheduled to end on June 30, 2007.  HB 1210 has unanimously passed the Indiana House and Senate. The House must now agree to minor changes made by the Senate before the bill goes to the Governor for his signature.

The focus of the Unit in the past two years as been to address the core of mortgage fraud – inflated real estate appraisals.  Unwitting consumers are sold a home artificially appraised well above the actual value of the home.  When the consumer attempts to refinance or sell the home, they discover that the home is tens or even hundreds of thousands of dollars below the appraised value.

The 287 actions have been filed with their respective boards housed under Indiana’s Professional Licensing Agency.  The Unit also filed a civil lawsuit against a Credit Service Organization that purported to provide ‘foreclosure consultant’ services.

mortgage fraud

1. Now, we’re getting to the source of mortgage fraud.  Any systems analyst can see that the real estate appraisal system is deliberately structured to facilitate the real estate industry.

   Appraisers are non-value-added and can easily be surpassed by automated systems.  This would take the teeth out of the moray.

   Posted by  on  04/10  at  09:42 AM

2. Your comment is ridiculous. Automated valuations are a joke. Eliminate the rogue appraisers and loan consultants.

   Posted by  on  04/13  at  06:12 AM

3. Stephen.  You obviously have no experience with AVM’s.

   Posted by  on  04/20  at  07:25 PM

4. Mr. Bishop is the reason we have endured a legacy of mortgage fraud in Indiana.  The loan officers make their living by closing loans.  If they can get a value using AVMs so be it.  The last thing they want to hear is the home will not appraise for their needed loan value.  So they “shop it” around to the inexperienced or greedy appraiser who will “get” their needed value.  What Mr. Bishop really fails to realize is the honest appraiser does not make as much money or friends as the dishonest ones.  It time to kick out the rouge/greedy appraisers, train the inexperienced appraisers and reward the honest appraiser.  Also, get rid of AVMs before the entire nation goes into a recession.  There are no computers which can tell you what the condition of a specific home.  Computers can’t see defects, smell mold, notice the location of a home in an industrial setting, etc.  Let’s keep the honest people in the business and get rid of the rift raft. - Al

   Posted by  on  04/26  at  04:33 PM