The real estate world is a cutthroat place where exorbitant amounts of money are often on the line. When a single investment can make or break one’s financial future, a homeowner might feel the temptation to turn to fraud as a way to skew transactions in their favor.
One common example of homeowner fraud is the act of making fraudulent real estate valuations in pursuit of securing a loan. This is a type of appraisal fraud, and it goes without saying that it is an illegal act with serious consequences.
How does appraisal fraud work?
When seeking a fraudulent real estate valuation, a homeowner or prospective buyer will typically work with a corrupt or bribed appraiser. Alternatively, the individual might attempt to forge the appraisal documents themselves without external help. The intent behind such criminal acts is often to use the falsified property value in securing a larger mortgage loan than they need or to obtain preferable refinancing and home equity options.
What are the consequences of appraisal fraud?
A realtor or appraiser who participates in falsifying property values risks losing their realtor license and may not participate in future appraisals. All individuals involved in a fraud scheme, including the prospective home buyer or seller who seeks to profit from fraudulent activity, are punishable under New Jersey consumer protection laws. This may entail penalties including jail time of 18 months or more.
Receiving a conviction for appraisal fraud can seriously affect an individual’s finances, freedom and reputation. Those accused of appraisal fraud should pursue a strong defense in pursuit of a favorable outcome.