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Appraisal fraud

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Sid Pachter

Sophomore Member
Joined
Feb 26, 2008
Professional Status
Banking/Mortgage Industry
State
Florida
Appraiser Admits To His Part In $25M Mortgage Fraud Scheme

Lanny Ross, 66, Leawood, Kansas, pleaded guilty to one count of conspiracy in a $25 million mortgage fraud scheme.

In his plea, Ross, a real estate appraiser, admitted he and co-defendants conspired to commit bank fraud and money laundering in a scheme to manipulate home buyers and housing appraisals, and to submit fraudulent mortgage loan applications to federally insured lenders.

Co-defendants in this case who already have entered guilty pleas include: Judy Brumble, Steve Middleton, Angela Parenza, and Elizabeth Hessel. Co-defendants awaiting trial include F. Jeffrey Miller, Todd Earnshaw, Brian Rouse, and James Moser.

In his plea, Ross admitted the conspirators produced advertising offering home buyers with poor credit and financial problems the opportunity to buy homes built by Jeffrey Miller with little or no down payment. By establishing a one-stop shop where buyers could choose a home and apply for financing, the conspirators were able to control the flow of information submitted to lenders. The conspirators used fraudulently inflated real estate appraisals to cause lenders to make loans up to, and in excess of, 100 percent of the property values. They also encouraged buyers to move into the homes before closing and then increased the price of the houses at closing. As a result of the fraud, lenders issued more than $25 million in loans.

Ross is set for sentencing Sept. 8, 2008. He faces a maximum penalty of 5 years in federal prison and a fine up to $250,000.

U.S. Attorney Eric Melgren commended the Internal Revenue Service – Criminal Investigation, Housing and Urban Development – Office of Inspector General, Assistant U.S. Attorney Richard Hathaway, and Assistant U.S. Attorney Christine Kenney for their work on the case.
 

jtinmichigan

Member
Joined
Feb 7, 2008
Professional Status
Certified Residential Appraiser
State
Michigan
neither the fine nor the time is enough.
 
Last edited:

OCApp

Member
Joined
Jan 19, 2003
Professional Status
Certified Residential Appraiser
State
California
at age 66 and with business as slow as it is for most of us, maybe free room and board for 5 years wouldn't be that bad of a thing for the guy.
 

Vernon Martin

Senior Member
Joined
Jun 8, 2005
Professional Status
Certified General Appraiser
State
California
I don't understand how appraisers could expect to get away with these types of fraud. Their names are on the reports.
 

Mary Tiernan

Senior Member
Joined
Dec 16, 2003
Professional Status
Retired Appraiser
State
Michigan
Funny how this thread is right above the thread titled

Ethics or Competence.
 

Indiana Jones

Member
Joined
Oct 16, 2002
Professional Status
Licensed Appraiser
State
Indiana
I don't understand how appraisers could expect to get away with these types of fraud. Their names are on the reports.

No kidding. If you're going to do it, go for the homerun and expect to live abroad for the next 20-50 years.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
don't understand how appraisers could expect to get away with these types of fraud.
Appraisers sell their services too cheap..it's like hiring a hit man for $40...a hooker for $3.. I would aver that Appraisers alone cut rates. Who has over the space of the last 10 years REDUCED their fees of ALL licensed professions in the nation?.. Just name one. Your surveyor? Abstractor? Lawyer? Doctor? Plumber? Nobody cuts rates except appraisers.. I don't understand.
 

Annelle

Junior Member
Joined
Jan 26, 2004
Professional Status
Certified General Appraiser
State
Arizona
I'm with you. Terrel. That is one reason the profession overall doesn't get the respect it deserves.

I just turned down another farm appraisal because the loan officer told the borrower the fee would be $300, if it was accepted by them, and then paid out of escrow no less.

Translated, that means the appraiser will work for free.

Unbelievable.
 

Ross (CO)

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Regardless of what you've read in the posting......I did not do it !

Oh, wait, Ross is his family name. Never mind.
 

Greg Bell

Senior Member
Joined
Jul 7, 2006
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Louisiana
Hey , nothing ever happens in Kansas with connecting it to the Wizard of Oz.Please no yellow Brick road jokes...
 
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