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PIC Program - Genesis Program

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Mwilliams

Thread Starter
Freshman Member
Joined
Mar 11, 2002
This baby is kinda long, but here goes.

The Camel and the straw so to speak.

Local lender/builder/mortgage co sends me an order with $151,000 sale price which is X'ed out and has $159,750 written in above it. Lender says even though this may be a bit high it should appraise as they just closed a couple of sales close by (sure enough they did) They go on to mention "Partners In Charity" as a special program on this deal.

Anyway, appraisal comes in short (duh), the investor wants more comps, and when the investor called me he mentioned a sale price of $151,750. I told him that I didn't remember the contract price and had sent the file to the basement so could he fax me a copy of his.

Interesting; his copy was an exact duplicate of my copy with the exception of the xxxx out contract price, his said $151,000 mine said $159,750, Both were faxed within 5 or so minutes from the originator, had identical initials, signatures etc. in the identical spots as well as identical marks around the contract. The only differences was mine had an extra hand written box with PIC (partners in charity) marked.

It appears to me that we got us a scam going on here. Where is the $8,750 ending up, in the builder/mortgage company pocket?

The only time I have seen this type of "charity program" is in a FHA loan setting. This is the first time I have seen this thing in a conventional loan.

Either way, is this a scam or is this the next market we are getting into.

Raketeering comes to mind, mortgage fraud , conspiracy etc.

Am I paranoid or what. But I think this type of deal stinks.

Abused appraiser
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
M,

My experience with this "junk" is that all parties to the transaction expect the appraiser to make the "donation" (in the form of a high value and his/her license on the line) rather than the owner. Everyone wants to "net out" and the appraiser is at fault when they can't....

Seems their thinking is all screwed-up, huh.

Ben
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
M,

Read the junk on their website

"To make the transaction fair for you, the buyer will most likely offer full value on your property. This benefits you dramatically. To illustrate this, you need to know that on average, sellers take a reduction in list price to sales price of 5-7%. This means that a home listed at $100,000 would normally sell for $93,000 to $95,000 if the buyer didn’t use the PIC Program. If they use the program, you will most likely sell your home for the list price of $100,000 and contribute 3.75% of the down payment plus a fee of only .75% of the sales price to PIC. This means you’ll net $96,250 instead of $93,000-$95,000."


So they know the home's not worth it but they all expect us to make it worth it. As I said, we're supposed to make the donation not the seller.


Ben
 

Mwilliams

Thread Starter
Freshman Member
Joined
Mar 11, 2002
Ben,

My attempt at bad humor I guess. I know exactly how these "deals" work and routinely turn them down when I see them. This one was so blatant I just had to share it with some people.

Thing that kills me is when a mtg originator sends the order, hoping for a high value and includes a statement that they will be happy to provide me with an updated contract reflecting the new purchase price.

Never ending supply of people willing to give you something for nothing (for a nominal fee of course).

Lenders are getting better and better at hiding their manipulation in attempt to close the deal.

No free lunch, remember?

I wish the people buying these homes would trot on down to the weekly sheriff sale so they can see what happens to the old fashion 110% -120% LTV mortgages from the mid 90's. Then save some money and buy home the old fashioned way. With sweat and integrity.

Mwilliams
 
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