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EVER TRY TO REPORT FRAUD

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pkbarnhart

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I mean "potential" fraud.

Scenario. My marketing area has been flat to a slide downward adjustment in prices for the past two or three years.

Property sale recorded in Sept 02 for $167,000, loan amount $158,000. Best comparable sale is the exact same design on the same street with similar finish, etc. for $140,000. Our home was a FSBO sale and the mortgage company (who I only rarely work for) is rumored to do "100% loans" with their patsy appraiser supporting any sales price required. I went by the home and interviewed the buyer who told me that the basement was unfinished. I called the seller, he sounded nervous and told me that the basement was finished.... I smell a rat.. Even with a finished basement the sales price should be less than $150,000. Anyway I call the Lender listed on the Deed of Trust. They say, "the loan has been sold to Fannie and we aren't interested". So I call Fannie... I've talked to at least 6 people so far and NO ONE could care less. I was even told today that "as long as the borrower makes his payment why should you care...If it goes into foreclosure then we will check on it." By my best guess the borrower has borrowed at least $20K more than the probable real sales price. I also failed to mention that the borrower was the secretary of a local builder who works for a company that owns the mortgage company who makes the 100% loans. (confused yet). Builder is also notorious for "selling" at 20% above list and kicking back to the buyer so that they get the 100% loan.

The bottom line is....these people have robbed someone of about $20K and I can't find anyone who cares. One of the guys at Fannie even told me that "the US Treasury will fail before Fannie goes under and we can handle a few losses". This guy would probably stand by and watch me get robbed because he knows I can "afford the loss".

If anyone has a number for someone in Fannie who might care please let me know.

Maybe I should just become a number hitter ... I hope to quit this racket in a few years and I should be gone before too many of the homes go into foreclosure. And hey...if the bubble bursts... there are going to be too many foreclosures to worry about trying to catch the culprits.

The Moral decay in this business is a reflection of the pending collapse of our economy.
 

Tater Salad

Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Missouri
I can't help, just wanted to comment.

It can get sickening, can't it? But I hate to see you quit as you're one of the good guys. Hope someone else can help you, but I wanted to chime in with my moral support. Good luck :cry:
 

Terry Russell

Senior Member
Joined
Feb 24, 2002
Professional Status
Appraiser Trainee
State
Montana
Write to your states':

Attorney General
Attorney General Office for Consumer Affairs

Write to the FFIEC http://www.ffiec.gov/enforcement.htm

fEDERAL fINANCIAL iNSTITUTION ENFORCEMENT COUNSEL

In Pennsylvania they are using the FBI. Try them.

Terry
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Similar situation - builder was selling a home at $125,000, actual sale price was $100,000, showing an 80% LTV with $25,000 down (no actual money ever changed hands), so that there actually was a 100% loan. I called the Texas Real Estate Commission. I was informed that if I wasn't the buyer and had been defrauded, they didn't want to know about it. I called the local Fannie Mae office - they didn't care either. These people are our toothless watch dogs.
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
ATC's comment is probably the most worthy. However I have walked this mile more than once and I received no benefit from the State AG here in Montana--as one of the cc:'s on the correspondence it did put a little scare in them.

It's tough to get even minimal recourse on these issues.

This morning on GMA, the report on the investment bankers, Smith Barney, and the bankers is sure a disgusting one. We can talk about ethics, but the foundation of ethics is integrity. When we realized there is little integrity in the core of the financial foundation of America, all americans need to wakeup and do something!

But what avenues do we have to do this? It is a sister venue to what you are discussing.
 

Karl

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Arizona
This is REALLY the HEART of all our complaints & frustration. Seems no one is concerned. This is WHY we ALL need to write when we find these little (I say little because when it's ONE it is little) problems sooner or later SOMEONE is gonna look & add up those LITTLE (who cares problems) & be the HERO that discovers there is a big problem. Maybe we should focus on one committee in congress & send a cc of all correspondence to them. Hopefully find one intern that dicovers the pattern of ABUSE. I always include in my correspondence at the end. Wouldn't U like to be the one that said; I told U this was happening, why wouldn't you listen back then. With so many of us on the Forum now & representing (I Think) every state there has to be some on here that have INFLUENCE in some political area's. what ever happened to the group representing all the different APPRAISAL ORGANIZATION (2 from each) was going to Washington. Did that ever take place???
 
Joined
Jan 16, 2002
I know exactly what you mean and how your feel, but the reality is that nobody cares. An appraiser friend of mine recently documented dozens of
sales being sold by a broker under-market value to his buddies, who then flipped them for more than full market value (listings were all banked owned REO's). The documentation was extensive and took up a lot of his time. He turned the info over to the FBI, and nothing happened.

While comping on a daily basis, I see all sorts of scams. Just the other day, I found a property that had 4 different owners in a 3 year period
and property was flipped from $120K to $210K as an FHA loan. Property is an illegal 3 family and Realtor is notorious for scams. It would require
my full attention to pursue each case I stumble upon - then what do you do with the info ? I can't afford to bother with this stuff as it eats up all your time.

Only once was I able to get an appraisers license revoked and that was this past Sept. 10th, and it took 2 years. The only reason this was accomplished was that the property owner filed the complaint with state attorney general, along with my documentation. It was a mortgage fraud, contract flip scam. The state is still investigating the broker and
investor.
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Barny,

No one cares about the other guys money,
unforunately its our money, part of
our national treasure.

As a retired ITT exec once said,
"Money goes where its wanted, and
stays where its treated well."

elliott
 

graindart

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Montana
RStrahan wrote:

builder was selling a home at $125,000, actual sale price was $100,000, showing an 80% LTV with $25,000 down (no actual money ever changed hands)


Just a thought, maybe the best place to report these type situations isn't to Fannie or your AG. Maybe the best thing to do is document the $125,000 selling price well, and submit the documentation to the IRS. I'm sure that some driven little IRS agent would like to find out why the IRS isn't receiving their full cut. If you have full documentation that the home supposedly sold for $125,000, and the builder is reporting the sale for tax purposes as $100,000, either the builder will have to admit to doctoring paperwork or pay Uncle Sam taxes on the extra $25,000 the builder made from each sale. I'm sure that it wouldn't be the latter, and would look great in the newspaper, probably front page if you live in a smaller city. Again, just a thought.
 

George Hatch

Elite Member
Gold Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
California
The General Accounting Office (GAO) is currently engaged in a widespeard probe of the appraiser licensing system. They're talking to most of the players and have sent out a survey questioning the state boards about their enforcement routines. This case might make for an interesting commentary. I'd send it in and detail all the apathy you ran across. It couldn't hurt.

George Hatch
 
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