The Office of Inspector General (OIG) at the U.S. Department of Housing and Urban Development (HUD) uncovered a series of cases of appraiser identity theft, according to a release by HUD’s OIG. The schemes varied but resulted from someone using the state certification number of a Federal Housing Administration (FHA) roster appraiser. The FHA roster appraiser was unaware of the misuse until it accidentally came to light, according to the bulletin.
Most of the schemes happened when an FHA roster appraiser provided his or her personal identification number (PIN) for the desktop appraisal software to a colleague or supervisor. The providing of the PIN was justified because the number was needed to keep the process timely, lenders could request a fast turnaround and it provided a contingency should the roster appraiser is away or unavailable.
“While these actions may seem innocent enough, they raise severe risks for misuse because the appraiser can never be sure the PIN will only be used with his or her knowledge and for legitimate purposes. Over the last couple of years, OIG has received more than a dozen reports of identity theft by colleagues or supervisors,” the bulletin said
Following are some case examples of the various schemes,” the bulletin said.
One example was discovered In Washington, where a FHA roster appraiser reported that someone conducted appraisals using his name. An OIG investigation found that reverse mortgage loan appraisals were performed by the appraiser’s former boss using the appraiser’s software PIN. The identity falsification was aided by a mortgage lender. The appraisal report used the FHA roster appraiser’s name but listed the phone and appraisal company of the former boss.
The offender was convicted of 55 counts of identity theft and mortgage fraud and sentenced to five years imprisonment. He also was ordered to pay $20,250 to the certified appraiser and homeowners that were defrauded. The conspiring lender was sentenced to 90 days in jail and six months community service for mortgage fraud.
In Illinois, a licensed appraiser used the name and license of two other appraisers when he signed off on appraisals that were used in fraudulent real estate transactions. The two appraisers whose identities were used were unaware that their names and license numbers were associated with the appraisals. The victims’ appraisal numbers and signatures were accessed by the perpetrator, who worked with the victims. The subject pled guilty to one count of forgery and was sentenced to 3 years in prison, according to the bulletin.
In California, an appraiser fraudulently used the identity, name, and professional credentials of a FHA roster appraiser 170 times to perpetrate an FHA residential appraising scheme. In February 2017, he presented a false email and resume, including the FHA roster appraiser’s name and certification number, to an appraisal company and pretended to be the certified appraiser. When interviewed by OIG special agents, the appraiser confessed to the schemes. In court, the appraiser pled guilty and was sentenced to five years of probation and community service.
Despite the penalties for these perpetrators of fraud, no penalty truly can repair the damaged reputation of the appraiser. Caution must be practiced at all times for the appraiser to keep his or her name in good standing.
“All appraisers should be aware that on page 5 of the Uniform Residential Appraisal Report, they are certifying under a federal criminal statute that the information on the form, including the identity of the appraiser is true and correct,” HUD says.
The OIG recommends that appraisers, to protect themselves against identity theft, keep the following points in mind:
• Do review a list of your appraised properties often to detect any that were not conducted by you, especially after you leave an appraisal firm;
• Do follow up on any indication that an appraisal that you did not perform was entered in your name;
• Do not give your system PIN to another person;
• Do not leave your PIN where it can be accessed by someone;
• Do not do business with a company that requires you to give it your PIN;
• Do not use the PIN of another appraiser, even if it is on his or her behalf; and
• Do not sign an appraisal that you have not personally performed.
“We applaud the HUD Office of Inspector General for raising awareness about appraisal related identity theft. Given the range of interests in appraisal results, and the advent of electronic documentation and signatures, identity theft presents a significant risk to lenders and consumers, and it’s an issue that the Appraisal Institute has provided education and guidance to the industry for many years.” Appraisal Institute President Jim Amorin said in the HUD bulletin.
Appraisers are also advised to file a report of any suspected acts of fraud by going to the OIG website at https://www.hudoig.gov/reportfraud or contact the special agent in charge in the Office of Investigation at https://www.hudoig.gov/about/where-were-located.