"Many of us have heard about, or will soon learn, the now-infamous Baltimore story. One borrower bought multiple houses on the same block, rehabbing one unit and copying its photos to make the others look renovated on paper. He changed appraisal condition statements, submitted identical photos to multiple lenders and walked through a maze of loans that started as 12-month bridge products and morphed into 30-year Debt Service Coverage Ratio (DSCR) loans."
"That story exposes the Achilles heel of modern valuation when people believe they can game images and PDFs rather than deal with actual properties. Virtual tours and Matterport models a 3D digital twin of a physical space, created using Matterport's technology are helpful, but nothing replaces a trained appraiser walking through a property. Boots on the ground matter. Phones still ring. A simple conversation with a borrower or the investor often prevents fraud nightmares."
"For every legitimate, efficiency-boosting advance, someone is building a weaponized version. Voice cloning has already moved from a clever demo to a tool for wire fraud. There are documented cases where a voice nearly identical to a borrower or a manager convinced someone to reroute funds. That is not science fiction; it is a real loss vector that demands stronger verification protocols than a simple it sounded like Joe."
One borrower purchased multiple houses on the same block, rehabbed one unit and reused its photos and appraisal condition statements to present other properties as renovated. Loans began as 12-month bridge products and later converted into 30-year Debt Service Coverage Ratio (DSCR) loans, producing roughly $200 million in apparent fraud when defaults occurred. Virtual tours and Matterport 3D models aid valuation but cannot replace in-person appraisals. Few loan processes include live conversations with borrowers, enabling fraud. Voice cloning has been used to redirect funds, making stronger verification protocols necessary. The same AI pattern-recognition tools that enable fraud can also detect anomalies across reports and imagery.
Read at www.housingwire.com
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