Do banks commit fraud? Do they steer appraisals? They do.
There is so much talk about how borrowers have defrauded the system and manipulated appraisals. Which I have no doubt they have but I represent several distressed borrowers trying to work out short sales and the lack of integrity on the part of some banks (not all of them) is astounding.
A Utah bank forecloses on a property and has an internal appraisal thirty days prior to the foreclosure for $275,000. The borrower owes $276,000. The bank buys the property back at the foreclosure auction for $245,000 and sues the borrower for $31,000 plus legal fees. When this property was purchased the borrower put 30% down and had made payments for three years on a 20 year amortized…