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Colorado House Increases Penalties for Appraisal Fraud

The Colorado House has passed legislation that will significantly increase the penalties for those appraisers who engage in appraisal fraud.

House Bill 1183 makes appraisal fraud a Class 1 misdemeanor punishable by up to 18 months in county jail and a fine of up to $5,000 for a first offender. A second conviction would be a Class 5 felony, punishable by up to three years in prison and a $100,000 fine.

Currently, first-time violators face a Class 3 misdemeanor with a jail term of up to six months and a $750 fine. A second conviction triggers the Class 1 penalties.

In 2007, Colorado also passed a law that prohibited brokers and lenders from pressuring appraisers. So, it’s not as though Colorado is focusing soley on appraisers. States are clearly fed up with this mortgage mess, and I suspect we are going to continue to see states increase the penalties for mortgage fraud.

Comments
  1. Lora Mac Alistaire

    Bravo!

  2. Someone is blowing smoke.

  3. David

    Show us a state issuing stong penalties and jail time for anyone who accepts a portion of the appraisal fee (other than the appraiser) and we can probably get excited about it. Any other type of regulation is simply a justification for collecting tax dollars from AMCs.

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