Bifurcated Appraisals; Wire Fraud; Updates & Options to Consider

August 27, 2019 – See our article published in today's MBA Insights newsroom, reviewing two very hot topics:  Wire Fraud, as well as Bifurcated (aka 'Hybrid') Appraisals.  You can find the article HERE, whereby we identify common issues, trends and some options to partner with experts to compliment your success.

UDATED Aug. 28, 2019 - See the end of this blog for commentary from a prominent member of the appraiser community, as Richard Hagar gives his perspective on "Why Bifurcated Appraisals Won't Work" (Interesting stuff)

A Synopsis of The Article

Wire fraudsters continue to target the mortgage industry in unprecedented numbers, second MBA Insights mortgage vendor news & views-2only to healthcare/medical.  And, there is a huge reason why:

  • IT'S WHERE THE MONEY IS! - Major funds tied to mortgage transactions
  • Decades of some very manual and risk-filled processes and procedures 
  • Even today, after major gains in fintech, many lenders still rely upon email, even when making proposed changes to wiring instructions 

According to the FBI, the mortgage closing process is an easy target via innovative phishing scams where earnest money and wired funds at the closing table are vulnerable. The most common scam is an attempt to confirm or suggest last-minute changes to wiring instructions via email. Read the article to see just how bad the trend has become in the mortgage space.  Mind-blowing!    

We give readers an additional prevention avenue to consider.  Best of all, you get FREE consulting advice and decades of deep experience in this kind of fraud, and it it embedded seamlessly into your operation.  Spoiler Alert... consider the commercial bank you use for your escrow accounts.  What are they doing for you today?  

Borrower education is nice, and it's prudent.  However, you will clearly read why it is not the final answer for wire fraud.  Borrowers are apparently not acting upon the warnings, given the pace of exponential growth of this fraud.  You must surround yourself by experts and their tools, a few of which we reference.

Bifurcated Appraisals

What are they, and what should you expect?  Read why lenders typically really like this 'gap product,' giving them the ability to balance cost and level of risk involved.  What's not to like about being able to control things, especially the combination of those two dimensions?

Well, just ask your friendly appraiser friends and colleagues.  In general, they are not at all happy about these 'hybrid' appraisals, often seen as the further marginalizing of the certified appraiser profession.  Regardless, bifurcated appraisals, and the increasing reliance on Big Data, has been in the works for many years.  With the frightening decline in numbers of certified appraisers, SOMETHING has to give – and the use of bifurcated appraisals is just one of those 'somethings."

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UPDATE (1-day after our publishing); A view from the appraiser community on "Why Bifurcated Appraisals Won't Work", authored by Richard Hagar, S.R.A


Thanks for reading.