Appraisers Asked To ‘Hit A Target Number’ In Las Vegas
In Business Las Vegas has this report on appraisal fraud. “It may come as no surprise to those in the real estate industry that Nevada is near the top of the heap when it comes to mortgage fraud. According to the Mortgage Asset Research Institute, Nevada ranks seventh when it comes to alleged mortgage fraud and material misrepresentation reported by major mortgage lenders, agencies and insurers.”
“One of the latest problems in mortgage fraud complaints are problems with appraisals, said David Berenbaum, of the Center for Responsible Appraisals and Valuations. ‘Many people are trapped in an upside-down loan, in that the value of the mortgage exceeds the value of the house,’ he said. ‘Valuation issues are of grave concern, and there are growing numbers of appraisal fraud issues in companies’ portfolios.’”
“Berenbaum said too often appraisers are pressured by lenders to ‘come in’ at a predetermined number, or risk being black-listed or by withholding payment.”
“The problem continues even in Las Vegas’ cooling housing market, said Debbie Huber, owner of Huber Appraisal Inc. and president of the Nevada Commission of Appraisers. Huber said she receives several phone calls a day from a lender asking her to hit a target number in an appraisal.”
“It happens so often that Huber and her staffers have a response posted by every phone: ‘I cannot accept the assignment with this condition because it violates professional ethics. You should be aware that I must develop the appraisal before I will know the results. I can only accept this assignment if you remove the predetermined value requirement.’”
“Huber said the callers usually hang up, some are bold enough respond that they’ll find someone who will. ‘I had one loan officer that told my office manager ‘good luck with your business, you’re going to need it,’ Huber said.”
“The Nevada Appraisal Commission only handles disciplinary matters regarding an appraisal. There are few places appraisers can go when they have a dispute with a lender.”
“The Center is encouraging lenders, appraisers, realtors and others in the housing industry to sign a ‘Code of Conduct’ to ensure homebuyers and homeowners receive accurate and fair appraisals for their homes.”
“Berenbaum said the group also plans to begin tracking complaints filed with the states nationwide. ‘Hundreds of complaints are not being acted on by state regulators,’ he said.”
The Las Vegas Review Journal had this today:
‘The Bureau of Land Management is preparing to sell a publicly owned parcel directly to a prominent Las Vegas developer at a price that critics say is far below market value.’
Also, thanks to the readers who sent in pictures this week!
Per UNLV - land always goes up in value. Note to self - add UNLV to the list of schools with ZERO credibility!
ok… where were these misplaced standing on principles loaded for bear when the bubble was inflating?
Looks like loaded for bear with a daisy in their mouths.
The Center also is encouraging lenders, appraisers, realtors and others in the housing industry to sign a “Code of Conduct” to ensure homebuyers and homeowners receive accurate and fair appraisals for their homes.
_______________________________
Sign another form with zero meaning. How about prosecuting someone??
As a Nevada prosecutor I’m telling ya these are tough “proves.” Financial crimes are notorious for their complexity and for the inability of juries to understand. Remember juries come from the same pool of folks who brought us this mess.
how about a sting operation mr proscecutor
Appraisals have become a joke. We all know how the system works. I guess that is a benefit of finding a seasoned realtor who has the good connections. They could be worth their commision simply based upon the fact they can get a shady appraisal. Sounds like a real ethical deal to me. What happened to the NAR and the code of ethics anyway?
They got the guys from Enron. It can’t be more complex than that? Have you tried to prosecute anyone??
Crispy&Cole and BottomFeeder
The Feds got Lay and Skilling, they have unlimited resources for a prosecution of that scale. We state prosecutors are hamstrung by politics and funding. You are right though, when the voters start losing money they will find the time and money to prosecute. I’m the D.A. of a rural Nevada county where the housing market is driven by the price of gold; we are doing pretty well right now. Anyway I’m retiring in 6 mos. to return to my hometown of Reno to sue homebuilders. I’ll pass the sting suggestion on to David Rogers the D.A. of Clark County (LV) at the next D.A.’s meeting.
By the time a sting is set up, sales will be at zero around the nation and no one is going to be giving a rat’s ass about any appraisal. The last comp is going to be higher than any newly negotiated sales price going forward at this point in time (I would think anyway). The barn door needed to be shut several years ago when the Fed’s saw what was happening, not now that the horse is so far gone it’s out of sight! It chose not to for some reason, but NOT out of ignorance of the problem!
BTW, just a guess and certainly no way to prove it but, doesn’t it seem like it has been just a little too easy to see this crash coming and the likely result?
Either the coming housing crash/currency crisis is intentional (tin foil hat theory) OR was baked in the cake, so to speak, as an unavoidable conclusion to “debt financing” (otherwise known as fractional reserve banking). Not that anyone on this blog wants to “go there” but does anyone other than myself see our (corrupt in my opinion) monetary system as the underlying problem here?
I want to see a perp walk parade!
Setup a fake apparaisal company and and as the lender come in and they pressure, lock em up for fraud. If they withold payment, lock them up for fraud.
This is too loosely regulated
yes, a “sting” operation.
I can see some great tv series on this too. Maybe a full feature length flim too. (smile)
It’s not so much inflated appraisals which are driving the market (because every appraisal is based on comps, even if they are not truly comparable), it’s the easy money being loaned to people who have no business having loans of the size they’re given.
Prosecutors should focus on a) borrowers who flat-out misstate their income on loan applications, then file bankruptcy when the market turns and they can no longer flip, or 2) builders who have pressured buyers to use the builders’ financing, then either had the buyers misstate their income or, on the pretext of “helping” the buyer, filled out the paperwork for them, and in the process inflated the buyer’s income. The latter scenario is harder to prove unless you can find a bunch of foreclosures in the same neighborhood against woefully unqualified borrowers who all used the builder’s financing program. For any one individual, it might have been a mistake or innocent error. Theoretically. When it has happened to a dozen people, there’s a case.
The effect of the builders’ actions is to sell a bunch of their houses to unqualified borrowers at inflated prices. Profiteering in its purest form.
“But wait,” you say. “If the builder defrauded its own mortgage broker / program, who is the victim?”
The victims are the appraisers, who must now accept the sales as “comps” for the entire neighborhood, the other buyers who must now pay the inflated price and other lenders who are now loaning on inflated appraisals and prices which would not exist but for the builders’ fraud. When the market collapses and prices revert, those innocent buyers will be grievously harmed as they lose hundreds of thousands of dollars on the value of their house, go negative on equity and wind up “trapped” in the house for a long time until they can pay it down or the market goes up again.
As a Nevada prosecutor I have to tell you that this would be a tough “prove.” Financial crimes are notorious for their complexity and inablilty of juries to comprehend. Jury pools are made up of the same folks who brought us this mess.
I think it will become much easier when the average person starts losing $$$ on their own home transactions and not just the flippers.
Appraisals have been full of corruption and criminal fraud to the umpteenth degree and everything has full documentation and legally valid signatures. This is going to be as gory and bloody as a full out slasher movie.
Fraud and manipulation are well illustrated in these two documentaries. Freeloaders - The Incentive to Freeload, The Century of the Self
One of the most noteworthy jewels in second film is how “wall street bankers” used mob psychology to convince people to to take out loans and buy stock in the 1920’s and how tobaco companies persuaded women to smoke cigarettes by getting them to think of the cigarette’s as a “torch of Freedom” and power.
Well, years later, when the smoke of manipulation cleared, we know a little more about the risks of taking out loans to buy stock and the addictive and health impacts of smoking cigarettes.
Los Angeles Friends In Deed
This news pretty much confirms what anyone on this board who has driven around LV knows already. There is simply no way that all of those empty McCookieCutters in the burbs of LV are worth what they are appraised at or priced at. No f-ing way.
Sorry for the OT but YAY! Just found this…a local TV news channel has finally admitted the condo bubble has burst in Panama City Beach, FL. First there was a developer that abandoned a site last week, leaving local residents mad aboutt the mess they left. And now this… http://www.wjhg.com/home/headlines/3016321.html
Be sure to scroll down on the right hand side to see the video.
BAAHHAHAHHAHA!
GREAT VIDEO!!!!
In the video, notice all the above-ground powerlines. Those will rip loose and flap in the wind if/when a big storm comes through there.
Hmm, I wonder where you put your generator if you live on the 15th floor in a condo tower? I guess you could put it on the balcony, but it would a pain to haul gasoline jugs up all those stairs on a account of the elevators having no power and all.
BeachBubble …..I don’t think you can kick up a generator inside a house/condo . I think a family just died recently doing that ,(it was in the news ). I don’t know what kind of generator it was .
LOVED the newscaster putting in a plug for her own house for sale. How desperate can you get?
I can’t see WJHG’s server, but a WMBB story is talking about the first possible big storm starting to form in the western Caribbean. Here we go….
The last few comments are the best - “Experts (aka Flippers/Realtors/Brokers) think the market will come back”. OF COURSE they do. What else would they say?
No doubt, what is a realtor going to say. Oh the market wont’ come back and were all screwed. What I think he should say is I can make you a deal on this 2003 Ford Taurus, because his next job is going to be selling cars.
funny!
at the very end, the newsgirl even tries to hawk her own house.
hahahaha - fb newsreader
LOL. She must own a condo there.
Let’s hope the housing market comes back real soon because I have a house for sale too.
This is going to get so ugly.
This looks like a good place to post the latest PCB MLS numbers:
PCB Condos:
May 2005 1,262
June 2006 2,412
LV Landlord sure has gone quiet. She’s either curled in a fetal position, transiting from the “shock and disbelief” to “paralyzing fear” stage, or she’s been forced to move back in with Mom & Dad, who have limited her Internet privileges.
LMFAO!
no she is getting trashed at the wall str journal blog
She has been pimping herself there for far too long.
She’s changed her handle to Vegas Gal and is anticipating a “second wave of appreciation in a year or two.” He he …
Follow this link and scroll down to the fourth post.
http://discussions.realestatejournal.com/RealEstateJournal%20Discussions/1
Remember that Iraqi nut who kept telling the press “There are no American soldiers in Baghdad!!” Well, LV has it’s own version of that poor soul in Vegas Gal a.k.a. LV_Landlord a.k.a. Soon To Be Toast.
We officially end the ‘denial’ stage of this bubble when LVLandlord finally agrees there is a bubble, but gets angry at the bubble blogs and the news media for creating it.
You guys want to see a funny picture? Scroll about half way down or so. The caption reads:
How many houses are for sale on this street in Tampa, FL? Too many to count! And this same scene is playing out all across the country. With this much supply, prices have nowhere to go but down.
Visions of the future in Las Vegas??
Oops! http://tinyurl.com/rh594
Wow. Is that picture real?
ANOTHER DUMB-FUCK
Meet Dena Webster, recently
profiled by our local paper,
The Palm Beach Post …
Ms. Webster bought 14 houses in my area during the boom. Now, she’s stuck with a whopping $50,000 in monthly mortgage payments.
But only four of those properties have tenants, and those tenants are paying monthly rents that are far lower than Ms. Webster’s payments. Cash is gushing out the door month after month!
And it gets worse: Ms. Webster is a real estate agent herself. Not only is she loaded up with poorly performing real estate investments, she also relies on real estate sales to make a living. Talk about a recipe for disaster! And don’t think for a minute that similar stories aren’t playing out all over this country
Sounds like a real greedy one. I Cannot believe the greed stories coming out of this mess.
Lets say I am a potential buyer in Ms. Websters market area.
Why would I buy any property from an Agent too stupid to run cash flow numbers before buying investment properties let alone put herself into bankruptcy doing it ? She must REALLY believe in any publicity is good publicity. Do her cards say DANA WEBSTER Palm Beach’s dumbest agent !
well put MoMoney. I couldn’t stop laughing.
I think there is a possibility that those sign adorn a remax office and are just advertisements for the agents that work there. Why else would there be forty remax signs and no others?. No company gets that much market share.