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"Inflated Appraisal Hurts Family" Article

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Bobby Byrd

Thread Starter
Sophomore Member
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Sep 22, 2003
Professional Status
Certified Residential Appraiser
State
Virginia
Anyone have any further information or tidbits about this property? I know it was on a thread awhile back, but I'd like to see if anything else has been uncovered about the property. Any Cumberland county appraisers have old MLS data?? Im curious about the agents that owned the property before the Petrones bought it,and what they paid for it. Working on an article review for, of all things......a business ethics class!!


Inflated appraisal hurts family
Mitch Weiss ASSOCIATED PRESS
HOPE MILLS, N.C. | After 25 years as a doorman on Manhattan's Upper East Side,
Carl Petrone was ready to retire from the cold winters and his daily commute.
Mr. Petrone and his wife, Marie, wanted a home someplace warm, and found it in
North Carolina — a redbrick
trilevel
on a quiet, treelined
street. It was bigger than their
tiny place in New York and came with the right price.
The home was appraised at $114,500. The real estate agents dropped the price by
$6,000 to make the sale. "We thought it was a steal," Marie Petrone remembers.
It was a steal — a steal from the Petrones.
As the couple would discover, they were the unwitting victims of an unscrupulous
appraiser and — as uncovered by a sixmonth
Associated Press investigation — a poorly
designed system unable to keep up with such dishonesty.
Only a month after the Petrones bought their house with a conventional mortgage,
Mr. Petrone was diagnosed with cancer. He and Mrs. Petrone decided to move back to
New York to be with family and listed the home at $118,500. There were a couple early
offers, all for much less.
"We thought: 'This is crazy,'" Mrs. Petrone said. "The appraiser said the house was
worth $114,500, so why would we sell it for $100,000?"
A new appraiser concluded that their house was worth only $98,000 and said the
Petrones had been duped in 1999: The home hadn't lost value. It was just never worth the
price they paid.
An angry Mrs. Petrone filed a complaint with the North Carolina Appraisal Board,
claiming that the original appraiser, Ed Britt, conspired with the real estate agents — who
also owned the house — to inflate its value.
"I called regularly to ask for updates, but most of the time they never returned my
calls. Finally, I just gave up," Mrs. Petrone said.
Board director Philip Humphries said his agency should have contacted the Petrones,
but he defended the board's overall performance in regulating the state's 3,500
appraisers.
"The mere fact that a number of complaints have been filed against a person doesn't
mean that all of the complaints reach the level of where there needs to be disciplinary
action taken," he said.
The board suspended Mr. Britt's license for a year. The formal order said it was for
failing to return the couple's phone calls, but board attorney Roberta Ouellette said the
discipline was also imposed for writing an inflated appraisal. Mr. Britt later faced
additional complaints once back in business, both of which were dropped after he died in
2003.
Mrs. Petrone was able to sell her home — just weeks before the bank was set to
foreclose. By then, Mr. Petrone was dead. She lost money on the deal and returned to
New York, where she lives with her two children and works two jobs to help make ends
meet.
"This was something that never should have happened," Mrs. Petrone said. "We were
taken advantage of, and there was no one there to protect us."
 
Last edited:

Elliott

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Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
A new appraiser concluded that their house was worth only $98,000 and said the Petrones had been duped in 1999.

What....is this Back to the Future and someone is messing with the space-time
continuum!! Also, I don't understand why the new appraiser doesn't say,
I appraised it for X on X date....cause that's all appraisers should say.
 

Brockway

Junior Member
Joined
Mar 8, 2004
Professional Status
Certified Residential Appraiser
State
New York
The board suspended Mr. Britt's license for a year. The formal order said it was for
failing to return the couple's phone calls, but board attorney Roberta Ouellette said the
discipline was also imposed for writing an inflated appraisal.

I'm curious to know if a lender was involved. Otherwise, how could the appraiser have been disciplined for failing to return the couple's phone calls?
 

Bobby Byrd

Thread Starter
Sophomore Member
Joined
Sep 22, 2003
Professional Status
Certified Residential Appraiser
State
Virginia
I would think at some point the lender had to be involved. I believe that the dicipline was because he refused to produce the work file, as required by NC state law. It doesnt mention an overinflated appraisal. I assume the "new" appraiser did a retro and found the value issue. What gets me in the article is no mention of the trusty real estate agents that owned the house to begin with. They knocked 6K off an overinflated price to begin with and it was still a rip off. Lenders and Agents love those "out of town" dollars.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
The formal order said it was for failing to return the couple's phone calls
You can be sanctioned for THAT?
 

Bearslide

Senior Member
Joined
Dec 9, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
This was, indeed, a sad story - and I fear is going to be repeated frequently as this mortgage mess continues.

I wish people - ESPECIALLY out of town buyers - understood that "MY Realtor........MY mortgage broker......MY lender really means "watch your wallet." They get caught up in the personalities and the snow jobs and don't understand that NONE of those people are their friends and NONE of those people is working for anything other than their own financial gain. They don't check things out for themselves and take all those MY people's words as the gospel truth. The APPRAISER was supposed to be the one un-biased participant - and apparently failed miserably.

It is a shame that it took SOOOOO long to sanction the appraiser. I would have thought a complaint from the public would have been acted on sooner.

Hopefully, the state boards who have been lax are beginning to understand their part in this mess and will begin acting accordingly - immediately. And perhaps Mitch Weiss' articles will give them a little shove in the right direction.:icon_mrgreen:
 

Bobby Byrd

Thread Starter
Sophomore Member
Joined
Sep 22, 2003
Professional Status
Certified Residential Appraiser
State
Virginia
You can be sanctioned for THAT?


"Edwin Britt (Fayetteville) - Following a
hearing, the Board suspended Mr. Britt’s residential
certification for one year effective
September 1, 2002. The Board found that
in October 2001, a complaint was received
against Mr. Britt regarding an appraisal he
had performed. Despite several letters, telephone
calls and personal visits to Mr. Britt’s
office, Mr. Britt did not produce the
appraisal report and workfile as required by
state law. Mr. Britt acknowledged that he
received the requests, and admitted that he
did not respond."

That is actually what came from the boards site. Seems a little different than what the author printed. No mention of the actual numbers, just that he failed to give the records.
 

Bearslide

Senior Member
Joined
Dec 9, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
It is a shame that it took SOOOOO long to sanction the appraiser. I would have thought a complaint from the public would have been acted on sooner.

I misunderstood the time frame - if the complaint was filed in 01 and resolved in 02, that is a reasonable time frame.
 

Anne E

Freshman Member
Joined
Aug 24, 2008
Professional Status
Banking/Mortgage Industry
State
North Carolina
Facts on the house

I called the Appraisal Board and got the address of the Petrone house. Public records show that they purchased it for $108,500 in January 1999 and sold it for $109,000 in December 2002. The property address is 3727 Floyd Drive, Hope Mills, NC That's in Cumberland County, NC. I don't have MLS access so I don't know about marketing of the proeprty before it went under contract. Maybe someone from that area can fill us in.

It appears to me that they may have "lost money" because they forgot to make several payments, and the unpaid interest was added on to the debt. Borrowers don't seem to understand that they can owe more on the house than they paid for it if they fail to make payments.

The Appraisal Board also told me that the complaint came in on October 16, 2001 and the hearing was held on July 16, 2002. I don't think that is unreasonably long.

Anne
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Anne,
Thanks for the research. I'm glad the AP reporter, Mitch Weiss, didn't
let those pertinent facts into the article. It restores my faith if you know
anything about a subject, the media will totally screw up the facts. I
wonder why he wrote about a virtual non-incident that happened 8 years ago?
 
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