Legal Question in Real Estate Law in Georgia

Is this mortgage fraud

Purchased a home in GA with appraised price roughly 20,000 higher then value per several RE agents, appraiser checked growing,stable and bank listed appraiser as prefered. The appraiser did not list the house next door had been a distress sale and it was a similar home. This all happend before the bust, and we have been trying to sell it for 3 years but we owe too much. If we would have know the area was not growing and that houses were repo-ed in the area we would not have bought there. We were new to the area. We feel the bank mislead us with a ''preferred'' appraiser and the appraiser was far from honest. Can we contest this? We now live in MO and rent this place out but we need to do something legally before we end up in foreclosure. We are current never late, but we don't make enough for two mortgages if the tennants move.


Asked on 7/16/08, 2:28 am

1 Answer from Attorneys
Scott Riddle Law Office of Scott B. Riddle, LLC

Re: Is this mortgage fraud

Generally, neither the lender nor their appraisers are responsible for the purchaser's decision about how much to pay for a property or how much to seek in a loan. Poor decisions in buying property and getting a loan is not fraud. A bank's mistake in relying on their appraiser and loaning too much money -- that the purchaser presumably asked for -- and then losing money in a default, is generally not fraud (on themselves). The common mortgage fraud comes in where the purchaser AND appraiser, working together, inflate the values and ask for a loan far in excess of the value, thus defrauding the lender.

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Answered on 7/16/08, 7:12 am


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