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The most common form of appraisal-related fraud arises when:

A. The consumer bribes the appraiser to increase the valuation
B. The mortgage loan originator alters digital copies of the appraisal report
C. The appraisal uses inappropriate comparables to determine the home value
D. The mortgage loan originator receives a bribe for using a particular appraiser

1 Answer

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Final answer:

Option (B), The most common form of appraisal-related fraud is when an appraisal uses inappropriate comparables to determine home value. Borrowers can reassure banks by showing strong credit history, stable income.

Step-by-step explanation:

The most common form of appraisal-related fraud arises when the appraisal uses inappropriate comparables to determine the home value. To reassure a bank about a borrower's ability to repay a loan, the borrower can demonstrate their creditworthiness and stability in a few ways. Firstly, they can provide a strong credit history and a high credit score, showing consistent, timely payments in the past.

Secondly, having a steady employment history and proof of current, stable income can help assure the bank that the borrower has the means to make loan payments. Finally, a substantial down payment decreases the loan-to-value ratio, indicating the borrower's financial commitment to the property.

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