New Mortgage Fraud

Post #3, is right on target.

Post #8 - Oh, yes,  an appraiser CAN be a part of a scam. A past client came to me for a purchase loan. The AMC appraiser assigned by the lender undervalued a purchase - when does that ever happen? My deal was dead unless I switched lenders and the buyer took another shot in the dark on an appraisal.

Long story short, the buyer talked to the seller. The seller talked to his bank and hooked the buyer up with them. The L O at the bank called the appraiser who had appraised the property two months earlier for a blanket loan. The appraiser called the buyer, assured them they could bring the value in. Voila! deal done.

Everybody talked to everybody here and it is FRAUD.  The bank had every incentive to unload this blanket loan. The buyer wanted the home "at any cost". How do you protect them? You don't - you let them sink. We don't need HVCC/AIR.

Now we get appraisers from out of market. They know nothing of the area and CANNOT talk to the agents. (Our courthouse records are seldom reliable online and these new appraisers don't think they should have to do a manual search at the courthouse.) Appraisers will use comps from markets that aren't comparable, because they don't understand the local dynamics.

I know that RE agents sometimes list properties over-valued, but most of the time we have some logic behind the valuation. (Besides "The seller wants X dollars.) Why shouldn't they talk to the agent to find out about comps?

Again, blanket rules by the feds that might work great in large markets, but really suck in rural markets.

I am surprised that this can happen. Most agents are complaining that homes that should appraise are not appraising and here they have appraisals at higher than market value.

Agree with you in #13 and with Brian #14. One size fits all does not work. Thank you for this valuable info! 

Great Post!

All this regulation and here we are again. Same old same old.

Face it crooks are just that crooks! No matter how much regulation you throw out there- will stop them.

George, sounds like a well laid out plan. In my opinion these unscrupulousness individuals should be prosecuted beyond losing their licenses. 

George: It's always sad to hear about this stuff. Just wait until the economy starts humming. That's when the liars and the cheats really go to town unfortunately. Thanks for your thoughts!

Hi George,  Not sure the HVCC rules are totally worthless or if your well written posts only confirms that the bad guys are ever more resourceful !

Hi George, great post. I think there will always be these bad guy types that prey on those less able. Laws may not always catch them, so we must be vigilant.

George -- Those who prey on unsuspecting elderly are the lowest of life forms. We need more and more posts like this to create better awareness. I know personally I have heard a lot about these types of scams on the news and in the papers, but people still get into situations where others just walk off with their money. It's a sad commentary on greed driving people to take advantage of others. Thanks for the post.

Thanks for the information George, seems to be a new scam coming along everyday. I am curious about how they did this one, apparently there is more to the story.

George, that was the type of thing that happened back in 2005,2006 and several groups right here in CT were caught, paid a fine and that was the end of it. The poor homeowners that bought defective properties for more than their paid a far more costly sum amd maybe even affected their lives for a long time.

George, cheating anyone is pretty awful.  But taking advantage of the elderly is even worse.  Hope they rot in jail.

George-  I never thought HVCC would accomplish what is was supposed to and don't believe it has helped consumers. That said, this type of fraud is unacceptable.

I am sad to hear this type of thing is happening.  I hope this is not a widespread practice and the "bad guys" are brought to justice.  I think it is very likely once there is discovery, if it comes out the appraiser played a part in this scam, they will be brought to justice as well.  It just may not be obvious yet.

George, well, I guess that new HVCC law didn't do anything. In my opinion we still need to be vigilant about phoney appraisals and collusion among professionals. I hope these ppl go to jail! Thanks for your post today,

You would think that they would learn to stop these practices, but greed is still out there.

I love Michael Bolton's (#3) comment. Those are the ones that ruin it for the majority, who are hard working, honest, people! :(

George, there has always been someone conning the system...prison...sounds to good for them!!

George no respect for the elderly, just had an experience with someone cheating a senior (this was not a mortgage but with contracted work) and it did not set well with me either.