Uncovering Deceptive Practices: A Data-Driven Examination of Inflated Home Appraisal in Mortgage

The study's findings contribute to the understanding of the dynamics of fraudulent appraisal practices and emphasize the need for continued regulatory measures to ensure the accuracy and reliability of property appraisals in the mortgage market. [...] The sales price recorded in the dataset reflects the property's value at the point of liquidation, which we consider to be a reliable indicator of its worth at that time. [...] The impact of HVCC is evident when we examine the difference between the actual home prices realized from the time of origination to liquidation for loans originated before and after 2012. [...] The model is trying to explain the drop in home values from origination date (measured as appraised value) till the liquidation date (which is the sales value of the property at liquidation) Moreover, this disparity in price reductions varies across different states captured by state dummies in the model, as depicted in Figure 1. [...] MOODY’S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.