What to do when you KNOW something is wrong

[Bill Mack]

I met some at the HUD mortgage fraud conference that have been getting my lists of address and they are thrilled to be able to catch these. I met more that want to be added to my list. The response is positive because I'm now reaching those that want this stopped as much as we do and are in positions to do something about it.

How reassuring that our vigilant Feds can follow up on spoon fed leads.

Appraisers that don't recognize that the whole system is corrupt fall into the mortgage industry's "useful idiot" category.

 

[xm39hnu]

As a loan broker you must agree that your house is far dirtier than ours.

First of all, welcome to the forum, Thomas Stone. Secondly, I don't agree with Bobby's statement above. I, like others here, have reviewed some appraisal reports that were real stinkers. Some were deficient due to sheer incompetence (in my opinion); others were obvious fraud or misrepresentation. Some were prepared by poorly-trained novices; some by very well-credentialed and highly "experienced" appraisers who had one year's experience 20 or more times.

No, Bobby, I can't agree that one house is dirtier than the other. Both sides are due some serious cleaning.

 

[Steve Owen]

I can't agree with that either. There would be no dirty deal with artificial or pushed value for any mortgage broker if there wasn't a dirty appraiser involved. It's sort of a which came first question....

 

[Bobby Bucks]

Jim it wasn’t a slight at any individuals involved, its simple math. One crooked appraiser can keep 10 crooked LOs in business, maybe more. I do know this, if my daughter announced she was engaged I would be far more concerned if she said her fiancée was a loan officer than an appraiser.

 

[xm39hnu]

I see what you mean, Bobby, and I don't disagree that a single appraiser can keep 10 LO's in business. But corruption in both houses is so rampant that neither can criticize the other. It's like two sewer workers arguing over who smells the worst.

 

[Thomas R Stone]

i can't dispute that the loan business has beem corrupted to a degree that fraud has become business as usual.I am a member of MBARL,do not condone or practice unethical behaviour,and am leaving the business.i picked up an appraiser trainee license here in california,and hope to find a position that will allow me to practice that profession and perhaps act as a buyers agent.the problems i see in the business stem from a lack of accountability,when loans can be packaged and sold to investors and pension funds who lack either the competence or will to perform due diligence as to their risk,there is no incentive to make good quality loans,and fraud is actively encouraged.bad money still drives out good money.take a loook at MBARL.org on the web,click on "facts" and you can see one reason home prices went so high for no fundamental economic reason."the mortgage fraud blog" by rachel dollar also has a lot of good information and links regarding fraud.it takes collusion between brokers,lenders,notaries and appraisers to commit these frauds,and it always surprises me how small the cash price is for someones self respect.

 

[Bobby Bucks]

it takes collusion between brokers,lenders,notaries and appraisers to commit these frauds,and it always surprises me how small the cash price is for someones self respect.

I agree. The crux is there is currently no restraint on the volume of that collusion.


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[Annemieke Roell]

I am attending a day-long seminar that our Board put on. Due to my bloodpressure reaching dangerous levels, I have removed myself from the area and am sitting in the hall.

Why? Because there are several appraisers in there whining about "lender pressure" and "what is the board going to do about it" and fee increases.

Quite frankly, I have never seen any of these people either on this forum contributing to the discussions as to how to do something about it, not have I ever seen them in any of the board meetings where issues of fraud are discussed.

The problem lies in both places but to solely blame one group or another is not right.

 

[Brian Bokor]

Pam and others

I have sent 2 addresses to the pre-referenced e-mail address...and I just want to make sure these are is the kind of shady transactions you are looking for...

SCENARIO 1 - listing price $350k, Sales Price $459k, recording Price $500k with RE's explanation as to the difference "home repairs"

SCENARIO 2 - listing price $698k, Sales Price $860k, recording Price $860k with RE's explanation as to the difference "seller contributions in excess of 6%" (I'd say so...but he "only got paid on the $698k, so what's the difference?"

We as appraisers should the very first people to discover these inconsistencies and should be well aware of these transactions/recordings during our due dilegence and the negative impact they have on market values if improperty utilized as Sales Comps.

Just make sure you always analyze your MLS history...if it's been on the market for 180 days with price dropping every 30 days, then all of a sudden it sells for $50k more than original list price (and exceeds 6%), then you've probably got a bad comp on your hands...and the review apprasiers are looking for use of these comps as it's real easy to spot.

And all you apprasiers out there that think this is NOT part of our job and responsibilities as Real Estate Apprasiers, you're just another part of the same problem.

Thx Pam (and others who are sending these addresses) for helping us to try & rid our chosen profession from crime....Mortgage fraud is crime and anything over $100,000 is a felony.

Respectfully

Brian

 

[Pamela Crowley (Florida)]

Thank you Brian! You've posted here and sent me some really good examples.

I'm now getting more and more mortgage fraud investigation firms asking to be added to my list. Web database coming up. I can't keep up with everything that's coming in now, but hopefully will get geared up to make it easier.

Scary when I consider the few appraisers from here that are sending me these situations, the fast growing number of them that are coming in to me, and the amount that must be out there that nobody is reporting.