Man, we've been hitting on this appraiser/mortgage broker quid pro quo for a long long time. The 2008 Congressional hearings will make this a top topic for sure. The system is corrupt, out of control and set up to screw the buyer, while paying off the corrupt Real Estate Industrial Complex.
From Las Vegas, home of unethical gross uneducated flim-flam artists, and overstated appraisals:
The most recent statistics from the FBI indicate that there was a seven-fold increase in reports of mortgage fraud — from more than 3,000 in fiscal year 1999 to almost 22,000 in fiscal year 2005, the institute reported. The FBI also has reported that federally-regulated institutions reported more than $1 billion dollars in losses because of mortgage fraud in fiscal year 2005, the group reported.
One of the latest problems in mortgage fraud complaints are problems with appraisals, said David Berenbaum, executive director of the Center for Responsible Appraisals and Valuations.
Berenbaum said too often appraisers are pressured by lenders to "come in" at a predetermined number, or risk being black-listed or by withholding payment.
The problem continues even in Las Vegas' cooling housing market, said Debbie Huber, owner of Huber Appraisal Inc. and president of the Nevada Commission of Appraisers.
Huber said she receives several phone calls a day from a lender asking her to hit a target number in an appraisal.
"I had one loan officer that told my office manager 'good luck with your business, you're going to need it,' " Huber said.
June 13, 2006
Mortgage fraud? Inflated appraisals? Unethical back scratching? Shocked! Shocked I say!
Subscribe to:
Post Comments (Atom)
9 comments:
corrupt appraisers appraised too high, loans were granted at the too high price
the market, not the corrupt appraisers, set the price in the end.
so buyers or owners who got a loan based on an inflated bogus appraisal? they owe significantly more than the home is worth, and they're upside down in a painful, pre-bankruptcy way.
this will unravel so hard, so fast and so ugly, I can't even imagine the reprecussions.
especially as the loans adjust.
Here in southeast Virginia you're starting to see companies that say "local appraiser only" with respect to getting loans. In other words, the local cartel is keeping the prices propped up as best as they can by excluding estimates from elsewhere. I question how long this will keep up before the state or the feds hear complaints of price-fixing.
What about the appraiser who will appraise low so you can get bargains. You can tie a property up for 45 days contingent on financing so that you can renegotiate on the 44th day with the new lowball appraisal. Then you can go another 30 days on the home inspection so you can have one more negotiation. I hope the seller disclosed all the condition problems and the fact that they did illegal work without permits. If not you will come back one last time for renegotiation after the close IN COURT! While all this happens the market continues to soften and your ability to hold the home is diminished
How’s that for the investment of the century.
Then you find out your buyer is a Harvard Lawyer.
eTrade refinanced our house in '03. The appraiser did a drive-by and voila!, we had a valuation 30% above the purchase price in '02. (no we didn't cash out, we lowered the rate to 5.5% on a 15-year fixed, and they paid us $12 at closing)
The bogus appraisal problem is so widespread, the FBI would have to hire thousands of new agents if they expect to prosecute these creeps.
I know this isn't a very realtor friendly blog, but I'll just say that I've always thought that agents in my business who had ANY involvment with appraisers on deals they were working on were corrupt.
An appraiser has a job to do and in my practice, I let them do their job.
I personally haven't had too many appraisal issues over the last couple of years, but I've always based offering prices on market prices and just let the other factors play out and then renegotiate if neccessary. If a seller wouldnt ajust the sale price, then there was no deal to be made. Simple as that.
I'm now offering to listing clients a rebate (at closing) of any appraisal they pay for, even before I enter into contract. If they can live with the appraisal they are given for offering price we can proceed. I don't give potential clients a list of appraisals and only offer the yellow pages for a source.
I want to do business as much as the next guy, but I've settled for smarter business and it's paid off handsomely.
Uh oh, look at what residents in Southern California, especially San Diego are resorting too due to "living beyond their means"
http://tinyurl.com/lbt6u
Expect this practice to skyrocket in the next few years.
What if you park that "Rotisserie Club" SUV in the garage of the McMansion that won't sell?
Bingo! - kill two birds with one stone!
Your blog I found to be very interesting!
I just came across your blog and wanted to
drop you a note telling you how impressed I was with
the information you have posted here.
I have a bad credit income low mortgage
site.
Come and check it out if you get time :-)
Best regards!
Your blog I found to be very interesting!
I just came across your blog and wanted to
drop you a note telling you how impressed I was with
the information you have posted here.
I have a bad credit income low mortgage
site.
Come and check it out if you get time :-)
Best regards!
Post a Comment