BLACK KNIGHT, CORE LOGIC MOVE TO AUTOMATED VALUATION FOR APPRAISALS

Appraisal fraud creates both civil and criminal liability. And even now, many licensed appraisers remain deeply uncomfortable with the current system of artificially inflated valuations. To keep the machine running, investment banks — acting through their principal agents, Black Knight and CoreLogic — have turned to automation. Property valuations are now generated by algorithms, not appraisers, and despite the clear requirements of law, no one takes responsibility.

For 16 years, thousands of appraisers have sounded the alarm. In 2005, more than 8,000 signed a petition to Congress warning that they were being pressured: inflate appraisals by at least $20,000 over the contract price or lose future work. The result? Homes purchased for $700,000 later revealed to be worth $300,000. The 2008 crash was devastating — and its effects still drain money from the American economy.

Why Appraisals Became the Core of the Scam

Securitization has been Wall Street’s feeding trough since the mid-1990s. It’s irresistible: virtually no risk, endless streams of cash from selling securities, and no real exposure to consumer defaults. But securitization requires a reference point — the illusion of a loan secured by property.

That illusion depends on inflated appraisals. Higher valuations trick consumers into believing they are making a sound investment. When homeowners inevitably default, the investment banks profit again through credit swaps and insurance policies. The kicker: those payouts go to the banks, not the investors who funded the scheme.

Automated Fraud with Plausible Deniability

To avoid liability, banks outsource and automate everything:

• Documents presented in court are mass-produced with little to no human oversight.

• Assignments and “original” notes are fabricated by intermediaries using automated systems.

• Appraisals are now algorithm-driven, giving all parties in the chain “plausible deniability.”

The truth is simple: there is no “lender” and no real “loan account.” What exists are payment histories manufactured to simulate an obligation. The original funding was covered many times over by securitization proceeds.

Legal Remedies — and Their Limits

• Direct lawsuits for appraisal fraud are possible, but often fail because homeowners discover the problem only after the statute of limitations has expired. Even when successful, judgments rarely cover the true extent of the damage.

• Truth in Lending Act (TILA) requires lenders to ensure appraisals are accurate, but without an actual lender in the transaction, that safeguard is meaningless.

• Judicial foreclosures: homeowners can raise appraisal fraud as a defense in recoupment, reducing or eliminating the amount owed up to the claim amount in the foreclosure.

Bottom Line

Appraisal fraud was — and remains — a cornerstone of Wall Street’s playbook. It lures consumers into overpriced loans, fuels the illusion of securitized “assets,” and ensures endless profits for banks while leaving homeowners and investors to absorb the losses.

Until courts and regulators confront the reality that these appraisals are manufactured to serve the securitization machine — not the market — the cycle will continue.

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Tags: Appraisal, Black Knight, CoreLogic
Posted in Corruption, Fabrication of documents |