Mortgage fraud on the rise despite new HVCC rules - Nevada way down sin list

When the real estate chaos engulfed the nation one of the alleged causes to it was how mortgage brokers were pushing appraisers around to "hit the number." Home loan professionals were smooth-talking them - in some cases supposedly being even rather loud about it - to value a property at what their contract said it should be. In those go-go years it commonly meant many appraisals came in high. This practice, in some shape or form fraud, had to be put under a large microscope the big mortgage banks were telling everybody who would listen and eventually were able to convince the government it all really was true and should be remedied yesterday. The rumor has it Wall Street does have some pull in Washington.

As a result the HVCC was born. The Home Valuation Code of Conduct, which Fannie Mae and Freddie Mac embraced last year. It bans mortgage brokers and loan officers from picking appraisers and basically handed the valuation process to appraisal management companies. The birth wasn't all that joyous, however. It instantly drew a lot of sharp flak from mortgage brokers, real estate agents, appraisers themselves and the home building industry, undisputed key elements in the real estate realm.

How is the HVCC doing nowadays?

MARI, or Mortgage Asset Research Institute, a LexisNexis shop, sheds quite a bit of light on this. According to its research - using data gathered from over 600 mortgage wholesalers - the number one fraud generator remains the mortgage borrower who supplies bad data - for instance on income, assets and employment - on the application. This amounts to 59% of all reported mortgage fraud cases in 2009, easily the dominant category.

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